RBI lays out norms for the voluntary conversion of SFBs into universal banks
The Reserve Bank of India (RBI) has set out certain provisions fulfilling which Small Finance Banks (SFBs) can voluntarily convert themselves into Universal Banks.
The eligible Bank will have to furnish a detailed rationale for such a transition, RBI said.
The RBI said that small finance banks willing to seek universal banking licence need to have at least Rs.1,000 crore of net worth while the regulator laid down a detailed set of eligibility rules for such transition.
Such conversion shall be subject to the fulfilling net worth requirement as applicable to Universal Banks, a satisfactory track record of performance for a minimum period of five years, and RBI’s due diligence exercise.
The bank intending to transit must have their shares listed on a recognized stock exchange; have a minimum net worth of Rs.1,000 crore as at the end of the previous quarter (audited); and have a net profit in the last two financial years; among others.
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