Reserve Bank of India Guidelines for Licensing of “Small ...

Reserve Bank of India Guidelines for Licensing of small Finance Banks in the Private Sector November 27, 2014. I. Preamble The Reserve Bank of India (RBI) last came out with a set of Guidelines for Licensing of new banks in the private sector on February 22, 2013. The process of Licensing culminated with the announcement by the RBI vide its Press Release dated April 2, 2014 that it would grant in- principle approval to two applicants who would set up new banks in the private sector within a period of 18 months. While preparing these Guidelines , the Reserve Bank recognized the need for an explicit policy on banking structure in India keeping in view the recommendations of the Committee on Banking Sector Reforms (Chairman: Shri M.)

Taking into account the above and that small finance banks can play an important role in the supply of credit to micro and small enterprises, agriculture and banking services in unbanked and under-banked regions in the country, the RBI has decided to licence new “small finance banks” in the private sector.

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