Latest News About
​SMALL FINANCE BANKS

SFB BANKS CAN CONVERT TO THE UNIVERSAL BANKS :

Dated 29.04.2024 : Small Finance Banks (SFBs) can convert into Universal Banks after fulfilling minimum paid-up capital/ net worth requirement as applicable to Universal Banks, satisfactory track record of performance as an SFB for a minimum period of five years and RBI’s due diligence exercise.

Now with the objective of bringing better clarity, RBI has notified the following eligibility criteria for an SFB to transition into a Universal bank :

1. scheduled status with a satisfactory track record of performance for a minimum period of five years;

2. shares of the bank should have been listed on a recognised stock exchange;

3. having a minimum net worth of ₹1,000 crore as at the end of the previous quarter (audited);

4. meeting the prescribed CRAR requirements for SFBs;

5. having a net profit in the last two financial years; and

6. having GNPA and NNPA of less than or equal to 3 percent and 1 percent respectively in the last two financial years.

The following conditions shall be applicable with regard to shareholding pattern:

1. There is no mandatory requirement for an eligible SFB to have an identified promoter. However, the existing promoters of the eligible SFB, if any, shall continue as the promoters on transition to Universal Bank.

2. Addition of new promoters or change in promoters shall not be permitted for an eligible SFB while transitioning to Universal Bank.

3. There shall be no new mandatory lock-in requirement of minimum shareholding for existing promoters in the transitioned Universal Bank.

4. There shall be no change to the promoter shareholding dilution plan already approved by the Reserve Bank.

5. The eligible SFBs having diversified loan portfolio will be preferred.
   
   To read RBI Notification dated 26.04.2024 , CLICK HERE

RBI REJECTS SFB APPLICATIONS :

Dated 13.04.2024 : The Reserve Bank had received 13 applications to set up banks under the Guidelines for 'on tap' Licensing of Universal Banks and Small Finance Banks. The names of these applicants were given in the press releases on April 15, August 30, December 31, 2021, January 04, 2023 and January 08, 2024 and are as follows :

Applicants under Guidelines for ‘on tap’ Licensing of Universal Banks

1. UAE Exchange and Financial Services Limited

2. The Repatriates Cooperative Finance and Development Bank Limited (REPCO Bank)

3. Chaitanya India Fin Credit Private Limited

4. Shri Pankaj Vaish and others

Applicants under Guidelines for ‘on tap’ Licensing of Small Finance Banks

1. VSoft Technologies Private Limited

2. Calicut City Service Co-operative Bank Limited

3. Shri Akhil Kumar Gupta

4. Dvara Kshetriya Gramin Financial Services Private Limited

5. Cosmea Financial Holdings Private Limited

6. Tally Solutions Private Limited

7. West End Housing Finance Limited.

8. Annapurna Finance Private Limited, Bhubaneswar.

9. Fino Payments Bank Limited.

Out of the above 13 applications , all the applications for Universal banks have been rejected by RBI . Out of 9 applications for SFB licences , 7 applications have been rejected by RBI so far . The two pending SFB applications are

1.Annapurna Finance Private Limited, Bhubaneswar.
2. Fino Payments Bank Limited.

To read RBI press release dated 12.04.2024 , CLICK HERE

FINCARE SFB TO MERGE WITH AU SFB :

SCHEME OF AMALGMATION OF FINCARE SFB WITH AU SFB

Dated 11.03.2024 : On 4th, March 2024 , Reserve Bank of India gave its formal approval for a scheme for Amalgamation submitted by Fincare Small Finance Bank and AU Small Finance Bank .

As per the scheme , shareholders of Fincare SFB will receive 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB .
All the branches of Fincare Small Finance Bank Ltd. will function as branches of AU Small Finance Bank Ltd. with effect from April 01, 2024.

On October 29, 2023, the Board of Directors of both AU SFB and Fincare SFB had approved the merger, and the ‘Scheme of Amalgamation’ was later approved by their respective shareholders at their meetings on November 27, 2023, and November 24, 2023, respectively. On January 23, 2024, the proposed merger scheme also received the approval the Competition Commission of India ("CCI") under the provisions of
Section 31(1) of the Competition Act, 2002.

With the RBI's approval, Fincare SFB will merge into AU SFB effective from 1st April 2024 and shareholders of Fincare SFB will receive shares of AU SFB in exchange for their shares in Fincare SFB at the approved share swap ratio. All employees of Fincare SFB will become part of the AU SFB family

About AU Small Finance Bank

AU Small Finance Bank Limited (AU SFB) is a scheduled commercial bank and has established itself as the largest SFB in India since starting its banking journey in April 2017. Established in 1996 by Mr. Sanjay Agarwal, a first-generation entrepreneur, AU SFB boasts a 28 years-legacy with deep understanding of the rural and semi-urban markets and customer segments.
The Bank operates from 1,049 banking touchpoints across 21 States & 3 Union Territories serving 46.8 Lac customers with an employee base of 28,904 employees. As on 31st Dec’23, the Bank has a net worth of ₹12,167 Crore, deposit base of ₹80,120 Crore, Gross Advance of ₹67,624 Crore and a Balance sheet size of ₹1,01,176 Crore.
​
About Fincare Small Finance Bank

Fincare Small Finance Bank is a ‘digital-first’ small finance bank offering banking services through banking outlets, ATM, WhatsApp, Video Banking, Mobile Banking, Internet Banking and website Chatbots. convenience for customers.
​
Fincare Small Finance Bank commenced banking operations on 21st July 2017 under Section 22 of the Banking Regulation Act, 1949. It was included in the Second Schedule to the RBI Act, 1934 published in the Gazette of India dated April 13, 2019. As of December 31, 2023, Fincare Small Finance Bank’s Gross Loan Portfolio amounted to ₹13,352 Crore, while Deposits reached ₹9,734 Crore. The Bank has
a customer base exceeding 59 Lakhs+, supported by over 14,800 employees. With a widespread presence, the Bank boasts 1,303 touch points strategically located across 20 states and 3 Union Territories

FINO BANK APPLIES FOR SFB LICENCE :

Dated 09.01.2024 : Fino payment Bank has applied to the Reserve Bank of India ( RBI ) for a licence to operate a small finance bank ( SFB ) , under the Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector dated December 05, 2019 .

As per the existing guidelines , Payments Banks can apply for conversion into SFB after five years of operations, if they are otherwise eligible as per the guidelines.

Fino Payments Bank is a fully owned subsidiary of Fino Paytech Ltd. . It was the first payments bank to go live with 410 branches and more than 25,000 banking points on day one. The bank was incorporated on 4th April, 2017​