The Reserve Bank of India on 8th August 2022, in order to provide more flexibility to small finance banks (SFB) to meet their customers’ foreign exchange business requirement, it has been decided that all the scheduled SFBs, after completion of at least two years of operations as Authorised Dealer Category-II, will be eligible for Authorised Dealer Category-I license, subject to compliance with the eligibility norms as notified bellow:
Eligibility norms for Small Finance Banks for Authorised Dealer Category-I
- The bank should have completed at least two years of operations as Authorised Dealer Category-II.
- The bank should have been included in the Second Schedule to RBI Act 1934.
- It should have a minimum net worth of ₹500 crore.
- Its CRAR should not be less than 15%.
- The net NPAs of the bank should not exceed 6%, during previous four quarters.
- It should have made profit in the preceding two years.
- It should not have defaulted in maintenance of CRR/ SLR during previous two years.
- It should have sound internal control systems.
- It should not have any major regulatory and supervisory concerns.
The eligible SFBs may approach Foreign Exchange Department, Central Office, Reserve Bank of India with their applications along with the supporting documents with regard to their eligibility and a copy of applicant’s banking license and Necessary Board resolution for conducting the activities permitted to an Authorised Dealer Category-I and for obtaining necessary authorisation from the Reserve Bank under section 10(1) of FEMA 1999 for grant of Authorised Dealer Category-I license.
