• Uttar Pradesh based Shivalik Mercantile Co-operative Bank Ltd to convert to a small finance bank (SFB), becoming the first urban cooperative bank (UCB) to make the transition
  • The UCB will get 18 months to comply with the requirements under the scheme, which state that banks with a minimum net worth of ₹50 crore and capital to risk (weighted) assets ratio of 9% and above are eligible to apply for voluntary transition to SFB
  • The SFBs are also required to maintain minimum capital adequacy ratio of 15% of its risk weighted assets (RWA) on a continuous basis and increase the minimum paid-up voting equity capital to ₹200 crore within five years of the date of commencement of business
  • In September 2018, RBI had come out with the scheme for voluntary transition of primary UCBs into small finance banks.
  • Under the scheme, the promoters are required to be Indian residents, with 10 years
  • of experience in banking and finance. Promoter or promoter groups should conform to the definition of the Sebi (Issue of Capital & Disclosure Requirements) regulations, 2009 and RBI guidelines on fit and proper.

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