“Small Finance Banks in the Private Sector” Key features of the Small Finance Bank guidelines are: 1. Objectives: The objectives of setting up of small finance banks will be to further financial inclusion by (a) provision of savings vehicles, and (b) 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. 2. Eligible promoters(Who can Apply): (a) Resident individuals/professionals with 10 years of experience in banking and finance; (b) companies and societies owned and controlled by residents. (c) Existing Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and Local Area Banks (LABs). Note : 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. 3. What financial services these banks can offer: (a) acceptance of deposits . (b) lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.( The small finance banks will be required to extend 75 per cent of their total credit in priority sector lending (PSL) . Note: There will not be any restriction in the area of operations of small finance banks. 4. The minimum paid-up equity capital for small finance banks shall be Rs. 100 crore. 5. The foreign shareholding in the small finance bank would be as per the Foreign Direct Investment (FDI) policy for private sector banks as amended from time to time. 6. The small finance bank will be subject to all prudential norms and regulations of RBI as applicable to existing commercial banks including requirement of maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
Posted on: Sun, 07 Dec 2014 08:02:58 +0000
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