RBI raised Minimum capital requirement for SGBs up to Rs 200 cr
The Reserve Bank of India has raised the minimum capital requirement for small finance banks to Rs 200 crore and revised the guidelines for Primary [Urban] Co-operative Banks [UCBs].
The Payments Bank has been granted permission to upgrade under the category of SGBs, while the Urban Co-operatives Banks desiring volunteer transition into SGBs would require an initial capital amount worth Rs1 00 crore, which will be needed to increase to Rs200 crore within five years from the date of commencement of operation.
The Fino Payments Bank has already applied for an SFB licence as per regulatory guidelines on Payments Bank conversion to SFB. The regulator is examining the application and awaiting further comments from the RBI as per reports.
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According to the notification, SFBs will be given scheduled bank status immediately upon commencement of operations, and the banks will be given general permission to open banking outlets from the date of commencement of operations. SFBs offer basic banking services, accepting deposits and lending to unserved and underserved sections, including small business units, small and marginal farmers, micro and small industries, and entities in the unorganised sector.
While, Payments Bank can provide basic savings, and deposit, payment and remittance services to people without access to the formal banking system.
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