Why small finance banks are in no hurry to become universal banks

The fear of rejection is real. Many of the SFBs are listed on the exchanges. They are aware that no new universal bank licence has been granted in the last 10 years

After the onset of economic liberalisation in 1991, a new generation of private sector banks took shape. The most prominent among them are ICICI Bank and HDFC Bank, both of which were incorporated in 1994. However, it has been a story of fits and starts, while the Reserve Bank of India (RBI) has taken its time to issue universal bank licences.

Till the middle of the last decade, aspiring entrants had to wait for the RBI to open the licensing window. One could only apply when the window opened, which it did once in the early 2000s, when Kotak Mahindra