Money & Banking

Tally Solutions and Cosmea Financial Holdings apply to RBI for SFB licence

Our Bureau Mumbai | Updated on August 31, 2021

Number of applicants wanting to set up small finance banks has gone up to six

The Reserve Bank of India (RBI) on Monday said it received applications from Bengaluru-based Tally Solutions and Mumbai-based Cosmea Financial Holdings for ‘on tap’ license to operate as small finance banks.

Tally Solutions delivers business software for small and medium businesses (SMBs). Cosmea Financial Holdings is involved in activities auxiliary to financial intermediation, according to zaubacorp.com.

With these applications, the number of applicants wanting to set up small finance banks (SFB) has gone up to six.

In April 2021, the central bank had announced that four applicants — VSoft Technologies, Calicut City Service Co-operative Bank, Akhil Kumar Gupta and Dvara Kshetriya Gramin Financial Services — had applied to set up an SFB under the December 2019 Guidelines for ‘on tap’ licensing.

SFBs primarily undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

Guidelines

As per the guidelines for ‘on tap’ licensing of SFBs, the minimum paid-up voting equity capital/net worth requirement is ₹200 crore (₹100 crore earlier).

For urban co-operative banks (UCBs), desirous of voluntarily transiting into SFBs, the initial requirement of net worth is ₹100 crore, which will have to be increased to ₹200 crore within five years from the date of commencement of business.

Payments banks can apply for conversion into SFB after five years of operations, if they are otherwise eligible as per these guidelines.

Further, SFBs will be given scheduled bank status immediately upon commencement of operations and they will have general permission to open banking outlets from the date of commencement of operations.

Published on August 30, 2021

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