RBI Small Bank Guidelines to Foster Inclusion (Dec. 8, 2014)
The Reserve Bank of India has issued guidelines for licensing small finance banks in the private sector to, among other objectives, better meet the needs of unbanked and underbanked populations and to provide credit to small businesses, farmers and small industries. The central bank sees an important role for small finance banks in the economy, and the guidelines address issues relating to small finance banks’ size, capital requirements, areas of operation, exposure norms, regulatory prescriptions and corporate governance and resolution.
The RBI said it will issue small finance bank licenses “on a very selective basis” to applicants that meet set requirements, have a flawless track record and are likely to conform to the best standards of customer service and efficiency. RBI will adopt a cautious approach in licensing small finance banks in the initial years and might not be able to issue licenses to all applicants meeting eligibility.
RBI already is receiving questions about the licensing rules and announced today clarifications will be posted to its Website. Questions must be sent by Dec. 15, 2014, to: Chief General Manager, Department of Banking Regulation, Reserve Bank of India, 13th Floor, Central Office Building, Fort, Mumbai–400 001, or emailed to [email protected].
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