The Reserve Bank of India (RBI) has released guidelines for the voluntary transition of small finance banks (SFBs) to universal banks. According to the central bank's guidelines, eligible small finance banks must have a minimum net worth of Rs 1,000 crore by the end of the previous quarter and comply with the prescribed CRAR requirements.

SFBs aiming to become universal banks must have scheduled status and a satisfactory track record of performance for at least five years. In addition, the shares of the bank must be listed on a recognized stock exchange, according to the RBI. The SFBs must also maintain a scheduled status and a satisfactory track record of at least five years, with a gross non-performing asset (NPA) ratio of 3% or less and a net NPA ratio of 1% or less in the last two financial years.

The central bank stated that the SFBs must fulfill the minimum paid-up capital/net worth requirements applicable to universal banks and maintain a satisfactory performance record as an SFB for a minimum of five years.

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