Banking/Finance

Timeline: Evolution of bank licensing in India

Modest beginningAgencies
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Modest beginning
The entire banking sector forms an indispensable part of India's economy. A sound financial system often stems from an early intervention. Here we take a look at the entire timeline of bank licensing in India:
Private Banks licensingAgencies
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Private Banks licensing
1993: 10 new private sector banks given banking licence. Promoters bring in Rs 100 crore capital

2001: Initial minimum paid-up capital raised to Rs 200 crore from Rs 100 crore
Paid-up capital/Voting rightsAgencies
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Paid-up capital/Voting rights
2004: Transfer of more than 5% of paid-up capital allowed with only prior approval of RBI

2010: Banks mandated to be set up through a wholly-owned non-operative financial holding company (NOFHC). NOFHC to hold minimum of 40% of voting capital to be locked for 5 years
RBI's interventionAgencies
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RBI's intervention
2016: RBI decides to issue on-tap licences to residents and professionals having 10 years of experience in banking and finance


2018: RBI allows voluntary transition of urban co-operative banks and small finance banks
On-tap for Small Finance BanksAP
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On-tap for Small Finance Banks
2019: Licensing of small finance banks will be on-tap with minimum paid-up voting capital/net worth requirement at Rs 200 crore
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