The central government had given license to 10 small finance banks in 2015. However, the business activities of small finance banks are limited as compared to large commercial banks.
Equitas Small Finance Bank (SFB) has received the approval of the Reserve Bank of India (RBI) to apply for merger of its promoter with itself. SFB’s promoter Equitas Holdings gave this information on Saturday. As per RBI’s SFB licensing guidelines, a promoter of an SFB can exit or step out of promoter status after a mandatory initial lock-in period of five years to satisfy the regulatory and monitoring requirements of the central bank and based on SEBI regulations. could. Experts say that this decision will not affect the customers of the bank. They will continue to get all the facilities as before.
As per the SFB Licensing Guidelines, a promoter of a Small Finance Bank can exit after a mandatory initial lock-in period of five years as per regulatory and supervisory convenience of RBI and as per SEBI regulations.
What is small finance bank
Small finance banks are like other commercial banks. But their scope is smaller as compared to other banks. This bank is with 75 percent business priority sector. In this, the area of ​​​​agriculture is more and priority is given to it.
With the opening of these banks, small businessmen, farmers and people in the unorganized sector get loans easily. These banks do business in areas where the reach of big commercial banks is very less. Let us tell you that Equitas Small Finance Bank was started on 5th September 2016.
Who supervises small finance banks?
The Reserve Bank of India (RBI) supervises small finance banks. Many strict guidelines have been set by the central bank for these banks. In terms of these guidelines, opening a savings account or investing in a small finance bank can be considered safe to a great extent.
How much amount deposited in the account will be safe?
In small finance banks, the amount up to Rs 5 lakh remains as safe as it is in SBI or other government banks or private banks. Actually, small finance banks are directly under the supervision of RBI. Small finance banks are also classified as scheduled banks by the central bank like PSUs and other private banks. Therefore, an amount up to Rs 5 lakh in a small finance bank is insured under the Deposit Insurance Program of the Deposit Insurance and Credit Guarantee Corporation (DICGC).
How safe is it to invest in these banks?
Fixed deposits or any other investment in small finance banks is as safe as PSUs and other private sector banks. If you are investing in FD then do not put all your capital in one bank. It would be better to invest money in FD schemes of different small finance banks. Even in small finance banks, an amount up to Rs 5 lakh is insured under the Deposit Insurance Program of DICGC. Therefore it is safe to invest capital up to Rs 5 lakh in a bank.
How safe is it to invest in these banks?
Fixed deposits or any other investment in small finance banks is as safe as PSUs and other private sector banks. If you are investing in FD then do not put all your capital in one bank. It would be better to invest money in FD schemes of different small finance banks. Even in small finance banks, an amount up to Rs 5 lakh is insured under the Deposit Insurance Program of DICGC. Therefore it is safe to invest capital up to Rs 5 lakh in a bank.
What the bank said in the filing
To apply to the banking regulator on 9 July 2021, seeking approval for the merger plan. In a regulatory filing, the bank said it would take steps to finalize the merger plan. Will submit to the Board of the Bank and EHL for approval. After this, further action will be taken as per the applicable rules and guidelines.
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