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The Reserve Bank of India on Monday said all scheduled small finance banks (SFBs) will be eligible for authorised dealer (AD) category-I licence after completion of at least two years of operations as AD Category-II.
This move is aimed at giving more flexibility to SFBs to meet their customers’ foreign exchange business requirement, the central bank said.
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The fresh issue of shares is being undertaken to for augment the bank’s Tier–1 capital baseThe AD Category-I licence is subject to eligibility norms, including minimum net worth of ₹500 crore, capital to risk-weighted assets ratio should not be less than 15 per cent, net non-performing assets should not exceed 6 per cent during previous four quarters, should have made profit in the preceding two years, among others.
Other eligibility criteria include, the SFB should not have defaulted in maintenance of cash reserve ratio/ statutory liquidity ratio during previous two years; should have sound internal control systems; and should not have any major regulatory and supervisory concerns.
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