i nc lu s i ve f i nanc e i nd i a re port 2014
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T
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5.2
Draft Guidelines for Small Banks and Payments Banks: Comparison
Specific guidelines
Small banks
Payments banks
Eligible promoters
Resident individuals/ professionals with
10 years of experience in banking and finance;
companies and societies;
NBFCs, MFIs, LABs;
(preference to banking/ financial sector
professionals, NBFCs and MFIs)
Authorized* non-bank PPI issuers
NBFCs, corporate BCs, mobile telephone companies, super-
market chains, companies, real sector cooperatives and public
sector entities;
banks (through stake in equity)
Assessment of fit
and proper status
Promoter’s past record spanning at least
5 years of sound credentials and integrity;
financial soundness and successful track record
of running business
Promoter’s past record spanning at least 5 years of sound
credentials and integrity;
financial soundness and successful track record of running
business
Scope of activities
Area of operation limited to contiguous
districts in a homogenous cluster of states/
UTs;
branch expansion needs prior RBI approval
during the initial 3 years;
no subsidiaries to undertake non-banking
financial services activities allowed;
no comingling of banking and other financial/
non-financial activities allowed
Acceptance of demand deposits (current/ savings deposits);
Deposit Insurance and Credit Guarantee Corporation of India
(DICGC) coverage extended to deposits mobilized;
maximum balance holding per customer restricted of
Rs. 100,000;
a variety of channels—branches, BCs, mobile banking, ATMs,
POS terminals—to be used for cash in and cash out;
secure internet banking is a possibility;
can function as BC of other banks for credit and other services;
no non-banking subsidiary allowed
Requirement of
capital
The minimum paid-up voting equity capital
of Rs. 100 crore;
minimum CAR of 15% (risk weighted assets)
maintained on a continuous basis
The minimum paid-up voting equity capital Rs. 100 crore;
a net worth of Rs. 100 crore to be maintained at all times;
Minimum CAR of 15% maintained on a continuous basis;
outside liabilities limited to a maximum of 20 times the
networth/paid capital and assets
Promoter
contribution
Preference for diversified shareholding;
Minimum 40% initial contribution locked in
for 5 years;
Promoter stake to be brought down to 30% in
10 years and 26% in 12 years
Preference for diversified shareholding;
minimum 40% initial contribution locked in for 5 years;
promoter stake to be brought down to 30% in 10 years and
26% in 12 years
Voting rights and
transfer/acquisition
of shares
Capped at 10 per cent; can be raised to 26% in
phases with RBI approval
Capped at 10 per cent; can be raised to 26% in phases with RBI
approval
Prudential norms
CRR and SLR as applicable to commercial
banks;
maximum loan size and investment exposure
capped at 15% of capital funds;
at least 50% of the loan portfolio to be
constituted by loans and advances of size up
to 25 lakh
Not applicable
Others
PSL targets and sub targets as applicable to
domestic SCBs;
in the initial 3 years at least 25% of the
branches to be opened in unbanked rural
centres;
technology-driven operations;
customer grievances cell
At least 25% of access points in rural centres;
fully networked and technology driven operations right at the
start;
customer grievances cell
Source
:
;
Note
:
*
Under the Payment and Settlement Systems Act, 2007.
