Mumbai: Within months of issuing licenses for two new full-fledged banks, RBI ON Thursday issued final norms for setting up of payment banks and small finance banks for the first time in the country. The move, aimed at deepening financial inclusion, will allow entities like mobile operators, super market chains and real estate cooperatives to set up payment banks, while existing NBFCs and micro finance lenders among others can apply for small finance banks.
The minimum paid-up equity capital for these new types of banks has been set at Rs 100 crore, RBI said, while adding that small Finance Banks can transit to universal bank subject to fulfilment of certain conditions. Earlier this year, RBI issued license to IDFC and Bandhan to set up full-fledged banks in first licenses issued after a gap of over a decade.
RBI said that the "objectives of setting up of small finance banks will be to further financial inclusion by provision of savings vehicles, and supply of credit to small business units, small and marginal farmers, micro and small industries and other unorganised sector entities, through high technology-low cost operations."
The eligible promoters for small finance banks would include resident individuals or professionals with 10 years of experience in banking and finance, and companies and societies owned and controlled by residents will be eligible to set up small finance banks.
Existing Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and Local Area Banks (LABs) that are owned and controlled by residents can also opt for conversion into small finance banks.
Promoter/promoter groups should be 'fit and proper' with a sound track record of professional experience or of running their businesses for at least a period of five years in order to be eligible to promote small finance banks.
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