Reserve Bank of India issued a circular No. RBI/2024-25/28DOR.LIC. REC. 20/16.13.218/2024-25 dated 26.04.2024 for Small Finance Banks as Voluntary Transition of Small Finance Banks to Universal Banks, which provides a tr

The RBI has also outlined norms regarding the shareholding pattern for SFBs wishing to convert to a Universal Bank. There is no mandatory requirement for SFBs to have an identified promoter. However, the existing promoters will continue in the same capacity upon transition to a Universal Bank. Also, SFBs will not be permitted to add or change their existing promoters during the transitioning phase. The conditions for SFBs pertaining to shareholding pattern to apply for a Universal Bank license under the SFB Guidelines 2024 are: There is no mandatory requirement for an eligible SFB to have an identified promoter. However, the existing promoters of the eligible SFB, if any, shall continue as the promoters on transition to Universal Bank. Addition of new promoters or change in promoters shall not be permitted for an eligible SFB while transitioning to Universal Bank. There shall be no new mandatory lock-in requirement of minimum shareholding for existing promoters in the transitioned Universal Bank. There shall be no change to the promoter shareholding dilution plan already approved by the Reserve Bank. The eligible SFBs having diversified loan portfolio will be preferred.