The RBI has announced fresh norms for setting up smaller banks in the country. Now on, minimum capital requirement for setting up such banks would be Rs. 200 crore as against Rs. 5 crore earlier.
As per the new guidelines, the minimum capital requirement to set up a full-fledged bank would be Rs 500 crore. The RBI move is aimed at covering un-banked areas through these smaller banks.
Sources say the RBI new initiative will bring banking facilities to people who are yet to take part in banking activities.
Earlier in a paper dealing with banking structures in the country, the RBI had hinted at allowing cooperative banks to function as local banks. Two urban cooperative banks — Saraswat Bank and Shamrao Vithal Co-operative Bank — have already started groundwork in this regard. As per an estimate, there were 1,606 urban cooperative banks in the country in 2013.