The small finance banks can play an important role in the supply of credit to micro and small enterp...........

Finance changing landscape in banking sector

The small finance banks can play an important role in the supply of credit to micro and small enterprises, agriculture and banking services in unbanked and under-banked regions in the country, the RBI has decided to licence new “small finance banks” in the private sector.

With respect to the new draft guidelines released by RBI for on tap licencing of small finance banks in private sector, which of the following statement is/are incorrect?

The minimum paid-up voting equity capital for small finance banks shall be Rs.200 crore

It will be licensed under Section 22 of the Banking Regulation Act, 1949.

The small finance bank shall be registered as a private company under the Companies Act, 2013.

The small finance banks will be given scheduled bank status once they commence their operations.

?All are correct.

Explanation:

The small finance bank shall be registered as a public limited company under the Companies Act, 2013. It will be licensed under Section 22 of the Banking Regulation Act, 1949 and governed by the provisions of the Banking Regulation Act, 1949; Reserve Bank of India Act, 1934; Foreign Exchange Management Act, 1999; Payment and Settlement Systems Act, 2007; Credit Information Companies (Regulation) Act, 2005; Deposit Insurance and Credit Guarantee Corporation Act, 1961.
• The small finance banks will be given scheduled bank status once they commence their operations.