The Reserve Bank on Saturday allowed Small Finance Banks (SFBs) to carry out simple financial activities without seeking a prior approval from it.
This will be applicable to those SFBs who have completed three years of operations.
To harmonise the instructions for existing SFBs - those to be licensed under Guidelines for on-tap Licensing, it has been decided to "exempt all existing SFBs from seeking prior approval of Reserve Bank for undertaking such non risk sharing simple financial service activities, which do not require any commitment of own fund, after three years of commencement of business of SFB.
It has also allowed for general permission to all existing SFBs to open banking outlets subject to adherence to Unbanked Rural Centre norms.
The Reserve Bank of India also clarified that it would be depended on the regulator's and Sebi's supervisory comfort or discomfort whether a promoter could cease to be a promoter or could exit from the bank after completion of a period of five years, when such a case comes.
In November 2014, the RBI had issued licences to 10 companies interested to launch small finance banks as part of its effort to further financial inclusion.
Disclaimer: No Business Standard Journalist was involved in creation of this content
