You can also open your own small finance bank, this is the way

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You must have heard of small finance banks. They work just like any other bank. But do you know that anyone can open a small finance bank? Yes, you can also open your own small finance bank. RBI will also give you a license for this. Small Finance Bank can be opened singly or jointly. RBI gives ‘On Tap’ license to Small Finance Bank. On tap means that any entity fulfilling the guidelines set by RBI will get a license only on application without any additional approval. For this, you should have knowledge of banking or financial sector.

Who can get the license?

Apart from single or group private sector companies, societies, non-banking finance companies, micro finance institutions (which provide small loans), local sector banks and payments banks can also apply for on tap license with RBI. At present there are many small finance banks in India, including AU Small Finance Bank, Capital Small Finance Bank, Equitas Small Finance Bank, ESAAP Small Finance Bank, Fincare Small Finance Bank, Jan Small Finance Bank, North East Small Finance Bank and Suryodaya Small Finance Banks are involved.

What is the eligibility to get a license?

To get an on tap license to open a small finance bank, you must have a capital of at least Rs 200 crore. At the same time, to become a small finance bank from an urban cooperative bank, it is necessary to have a net worth of at least Rs 100 crore. Apart from this, the net assets are also required to reach 200 crores during 5 years from the date of commencement of work as a small finance bank of any such bank.

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And it will just start

Small Finance Bank, which meets RBI guidelines, will get the status of Scheduled Bank from the day of commencement of business. Apart from this, with the approval of business, small finance bank will also get approval to open outlets. For information, let us know that even those doing business as a payments bank for 5 years can apply for Small Finance Bank.

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