The Reserve Bank of India has released operational guidelines for small finance banks and payment banks.
The prudential regulatory framework for small finance banks (SFBs) will largely be drawn from the Basel standards. However, given the financial inclusion focus of these banks, it will be suitably calibrated, RBI said.
The minimum capital requirement for SFBs will be 15%, with the common equity tier I level set at 6%. According to the guidelines, Liquidity Coverage Ratio (LCR), as applicable to scheduled commercial banks, will be applicable to small finance banks. The minimum LCR till December 31, 2017, will be 60% and 70% by January 1, to be increased to 100% by January 1, 2021. Net Stable Funding Ratio will be applicable to small finance banks on par with scheduled commercial banks as and when finalised, RBI said.
SFBs will be permitted to use Interest Rate Futures (IRF) for the purpose of proprietary hedging. Further, as regards the foreign exchange business, SFBs would be permitted to use derivatives for proprietary hedging only, as applicable to AD Category II licence holder.![]()
The Reserve Bank of India has released operational guidelines for small finance banks and payment banks.
The prudential regulatory framework for small finance banks (SFBs) will largely be drawn from the Basel standards. However, given the financial inclusion focus of these banks, it will be suitably calibrated, RBI said.
The minimum capital requirement for SFBs will be 15%, with the common equity tier I level set at 6%. According to the guidelines, Liquidity Coverage Ratio (LCR), as applicable to scheduled commercial banks, will be applicable to small finance banks. The minimum LCR till December 31, 2017, will be 60% and 70% by January 1, to be increased to 100% by January 1, 2021. Net Stable Funding Ratio will be applicable to small finance banks on par with scheduled commercial banks as and when finalised, RBI said.
SFBs will be permitted to use Interest Rate Futures (IRF) for the purpose of proprietary hedging. Further, as regards the foreign exchange business, SFBs would be permitted to use derivatives for proprietary hedging only, as applicable to AD Category II licence holder.
The prudential regulatory framework for small finance banks (SFBs) will largely be drawn from the Basel standards. However, given the financial inclusion focus of these banks, it will be suitably calibrated, RBI said.
The minimum capital requirement for SFBs will be 15%, with the common equity tier I level set at 6%. According to the guidelines, Liquidity Coverage Ratio (LCR), as applicable to scheduled commercial banks, will be applicable to small finance banks. The minimum LCR till December 31, 2017, will be 60% and 70% by January 1, to be increased to 100% by January 1, 2021. Net Stable Funding Ratio will be applicable to small finance banks on par with scheduled commercial banks as and when finalised, RBI said.
SFBs will be permitted to use Interest Rate Futures (IRF) for the purpose of proprietary hedging. Further, as regards the foreign exchange business, SFBs would be permitted to use derivatives for proprietary hedging only, as applicable to AD Category II licence holder.
The Reserve Bank of India has released operational guidelines for small finance banks and payment banks.The prudential regulatory framework for small finance banks (SFBs) will largely be drawn from the Basel standards. However, given the financial inclusion focus of these banks, it will be suitably calibrated, RBI said.
The minimum capital requirement for SFBs will be 15%, with the common equity tier I level set at 6%. According to the guidelines, Liquidity Coverage Ratio (LCR), as applicable to scheduled commercial banks, will be applicable to small finance banks. The minimum LCR till December 31, 2017, will be 60% and 70% by January 1, to be increased to 100% by January 1, 2021. Net Stable Funding Ratio will be applicable to small finance banks on par with scheduled commercial banks as and when finalised, RBI said.
SFBs will be permitted to use Interest Rate Futures (IRF) for the purpose of proprietary hedging. Further, as regards the foreign exchange business, SFBs would be permitted to use derivatives for proprietary hedging only, as applicable to AD Category II licence holder.