RBI may issue guidance on SFB upgradation to universal banks

The Reserve Bank of India is expected to issue guidelines or a circular that could pave the way for small finance banks to become universal banks. This circular is expected to outline the necessary requirements for SFBs seeking to convert into universal banks, including details of the application process for this upgrade.

At present, SFBs can seek to become universal banks upon completion of five years of operations as a small finance bank. The current licensing norms for SFBs do not have any additional requirements or conditions to be met to convert to a universal bank.