RBI Guidelines for Small Finance Bank license- 14.09.2019

(i) The RBI yesterday have formed draft guidelines for Small Finance Bank(SFB).

(ii) The Payment bank can now apply license for SFB if it has a Net-Worth of 200 Cr.

This is good news for Fino-Payment Bank as they can now apply for SFB license. This will give them a lot of opportunities to work with which is lacking in the payment bank. For example, Payment Bank can’t lend, and they can’t have deposit more than 1 lakh. With SFBs license such limitation won’t apply “.

(iii)  Once they get license, Promoters’ stake in SFBs should be brought down to 15% in 15 years.

(iv) SFBs have to mandatorily list within 3 years of net worth reaching ~500 crores.

(v) SFBs can distribute third-party financial products only after 3 years of operation.