RBI grants ‘in-principle’ approval to 10 applicants for Small Finance Banks. Consider the following statements regarding Small Finance Banks:
1) Small Finance Banks aim to address financial inclusion.
2) The minimum paid-up capital requirement for these banks would be Rs 100 crore only.
3) At least 50% of the loans should constitute loans and advances of up to Rs 25 lakhs.
Which of the above statements are correct?
RBI grants ‘in-principle’ approval to 10 applicants for Small Finance Banks. Consider the following statements regarding Small Finance Banks:
1) Small Finance Banks aim to address financial inclusion.
2) The minimum paid-up capital requirement for these banks would be Rs 100 crore only.
3) At least 50% of the loans should constitute loans and advances of up to Rs 25 lakhs.
Which of the above statements are correct?
The correct option is A All of these
(Source : PRS)Small Finance Banks aim to address financial inclusion by providing: i) banking services, ii) instruments to promote savings, and iii) credit to small business units, marginal farmers, micro and small industries among other entities. The validity of the in-principle approval will be 18 months. Once the applicants fulfill the conditions laid down as part of the approval, the RBI will consider granting them a license to commence operations.
Key features of Small Finance Banks are:
- · The minimum paid-up capital requirement for these banks would be Rs 100 crore.
- · Regulations and prudential norms of the RBI will be applicable to all small finance banks, including requirements to maintain the Cash Reserve Ratio and Statutory Liquidity Ratio.
- · The banks will be required to extend 75% of the Adjusted Net Bank Credit to priority lending sectors, as classified by the RBI.
- · At least 50% of the loans should constitute loans and advances of up to Rs 25 lakh.
The banks will not be eligible for automatic conversion into universal banks (banks which offer commercial and investment banking services). Such a transition will be subject to fulfillment of the capital requirements and the banks having a sound track record of performance.
All of these
(Source : PRS)Small Finance Banks aim to address financial inclusion by providing: i) banking services, ii) instruments to promote savings, and iii) credit to small business units, marginal farmers, micro and small industries among other entities. The validity of the in-principle approval will be 18 months. Once the applicants fulfill the conditions laid down as part of the approval, the RBI will consider granting them a license to commence operations.
Key features of Small Finance Banks are:
- · The minimum paid-up capital requirement for these banks would be Rs 100 crore.
- · Regulations and prudential norms of the RBI will be applicable to all small finance banks, including requirements to maintain the Cash Reserve Ratio and Statutory Liquidity Ratio.
- · The banks will be required to extend 75% of the Adjusted Net Bank Credit to priority lending sectors, as classified by the RBI.
- · At least 50% of the loans should constitute loans and advances of up to Rs 25 lakh.
The banks will not be eligible for automatic conversion into universal banks (banks which offer commercial and investment banking services). Such a transition will be subject to fulfillment of the capital requirements and the banks having a sound track record of performance.
