BANKING AFFAIRS

Detailed explanation-1: -The Reserve Bank of India (RBI) has today decided to grant “in-principle” approval to Centrum Financial Services Limited (the applicant) to set up a small finance bank under general “Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector” dated December 5, 2019.

Detailed explanation-2: -The bank should have been included in the Second Schedule to RBI Act 1934. It should have a minimum net worth of ₹500 crore. Its CRAR should not be less than 15%. The net NPAs of the bank should not exceed 6%, during previous four quarters.

Detailed explanation-3: -Primary (Urban) Co-operative Banks (UCBs), which are desirous of voluntarily converting into small finance bank, may refer to Scheme on voluntary transition of Urban Co-operative Bank into a Small Finance Bank (Circular reference no. DCBR.

Detailed explanation-4: -“All stakeholders are advised to transact with only those existing PAs (a) who have been granted in-principle authorisation or (b) whose application is currently under process, ” RBI said in a release.

Detailed explanation-5: -Any individual/entity with at least 10 years of experience in banking and finance at the senior level or private entities with 10 years of successful track record are eligible to apply for on-tap licensing as UBs. Secondly, aspiring entities ought to have assets of Rs. 5000 crore or above.