RBI prescribes norms for small finance banks looking to deal in forex

The Reserve Bank on Monday mentioned small finance banks which have accomplished two years of operations and have a minimal internet value of ₹500 crore can deal in overseas trade. In a round, the RBI mentioned that is being permitted with the target of giving extra flexibility to small finance banks (SFBs) to fulfill their prospects’ overseas trade enterprise requirement.

Other standards for getting into the foreign exchange enterprise embrace revenue within the previous two years and internet NPAs not being greater than 6 per cent within the earlier 4 quarters.

Small finance banks will now be capable to provide a variety of foreign exchange merchandise to their prospects. In a transfer to supply flexibility to small finance banks the Reserve Bank has allowed small finance banks which have accomplished two years of operations of as Category-II Authorised Dealer to do Category-I Authorised Dealer enterprise, topic to compliance of sure norms.

“With the objective of giving more flexibility to SFBs to meet their customers’ foreign exchange business requirement, it has been decided that all the scheduled SFBs, after completion of at least two years of operations as Authorised Dealer Category-II, will be eligible for Authorised Dealer Category-I license, subject to compliance with prescribed eligibility norms” mentioned a notification issued by RBI.