Contact Your Financial Adviser Money Making MC
28
September 2018
 |
RBI (The
Total Investment & Insurance Solutions)
The Reserve
Bank of India (RBI) on Friday allowed voluntary transition of primary (urban)
co-operative banks (UCBs) into small finance banks (SFBs).
"In
keeping with the fast paced changes in the banking space and in order to
facilitate growth, a scheme for voluntary transition of UCBs into SFB will be a
step forward to provide full suite of products and services, sustain
competition, raise capital, etc. Accordingly, this scheme has been introduced
for voluntary transition of a UCB into SFB by way of transfer of assets and
liabilities," the central bank said in a notification.
As per
RBI, UCBs with a minimum net worth of Rs50 crore (Rs500 million) and
maintaining capital to risk (weighted) assets ratio of 9% and above are
eligible to apply for voluntary transition to SFB under this scheme.
The
promoters are required to be Indian residents, with 10 years of experience in
banking and finance. Promoter or promoter groups should conform to the
definition of the SEBI (Issue of Capital & Disclosure Requirements) Regulations,
2009 and RBI guidelines on ‘fit and proper’.
RBI
says it would assess the ‘fit and proper’ status of the applicants on the basis
of their past record of sound credentials and integrity; financial soundness
and successful track record of professional experience or of running their
businesses.
The
small finance banks are required to have minimum net worth of Rs100 crore (Rs1
billion) while starting the business. These banks are also required to maintain
a minimum capital adequacy ratio of 15% of its risk weighted assets (RWA) on a
continuous basis, and ensure availability of adequate capital. Promoters of the
SFB are needed to maintain at least 26% of the paid-up equity capital in the
Bank.The Total Investment &
Insurance Solutions
No comments:
Post a Comment