RBI allows on-tap licensing of SFBs to drive financial inclusion

RBI said more time is needed to review the performance of payments banks before considering their licensing to be put on tap

The RBI will allow on-tap licensing of small finance banks (SFBs) to drive financial inclusion, it said on Thursday. 

“A review of the performance of SFBs reveals that they have achieved their priority sector targets and thus attained their mandate for furthering financial inclusion. Hence, there is a case for more players to be included to enhance access to banking facilities to the small borrowers and to encourage competition,” an RBI statement on Developmental & Regulatory Policies said. 

The RBI will issue draft guidelines for on-tap licensing of SFBs by the end of August. This will allow aspirants to apply for the