Under Companies Act 2013,Small Finance Banks are registered as public limited company and are licensed under section 22 of the Banking Regulation,1949 and primarily governed by Banking Regulation Act,1949 and RBI Act,1934. Small Finance Banks were introduced with the purpose to serve rural and semi-urban areas like small businesses, unorganized areas, etc. They make money by collecting it from current and saving account depositors, fixed depositors, etc. Every small finance banks needs approval from RBI before opening of any new branch. It should extend 75% of its ANBC to the classified sectors under PSL by the RBI.
No, a promoter of large business/industrial house cannot be promoter of small banks
SFBs are subjected to all the stated regulations by the RBI as well as those exist for commercial banks.
No, there is no cap on the number of branches that can receive license to be SFBs.
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