On 13 September, the Reserve Bank of India (RBI) issued draft guidelines for ‘on tap’ licensing of small finance banks in the private sector. The move comes after a review of the performance of the existing small finance banks, which were granted in-principle approval in 2015. RBI had issued the Guidelines for Licensing of “Small Finance Banks” in the Private Sector on November 27, 2014. It was notified in these guidelines that after gaining experience in dealing with these banks, the Reserve Bank would consider ‘on tap’ licensing of these banks.
With an aim to encourage competition, RBI announced in its Second Bi-monthly Monetary Policy Statement, 2019-20 dated June 06, 2019 that it would put out draft guidelines for ‘on tap’ licensing of such banks. The Central Bank has placed these draft guidelines on its website and has invited comments from stakeholders and members of the public until October 12, 2019.
Nasscom has prepared a Policy Brief on the draft guidelines (link).
You are requested to email us your inputs at email@example.com by October 4, 2019 (Friday) so that Nasscom can consider them in its response to RBI.