Transition woes: SFBs' long bumpy road to becoming universal banks

The RBI requires SFBs to provide a detailed rationale for their desire to convert into a universal bank. Those with a diversified loan portfolio will be preferred

Reserve Bank of India (RBI) Governor Sanjay Malhotra, in an interview to Business Standard this week, said the central bank would soon take a decision on the applications made by small finance banks (SFBs) to convert into a universal bank.  “The proposed review of the bank licence framework shall be a study and assessment of the extant framework, in the context of current as well as the evolving economic priorities, so that banks are able to meet the funding needs of aspirational India. As far as SFB’s applications for transition into Universal Banks are concerned, these applications are under various