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Which of the following correctly describes one of the key eligibility criteria for Small Finance Banks (SFBs) to transition into Universal Banks (UBs) under the on-tap licensing policy?

1. A minimum net worth of ₹1,500 crore and scheduled bank status with at least 3 years of operation.
2. A minimum net worth of ₹1,000 crore, scheduled bank status, and a satisfactory performance track record of at least 5 years.
3. A minimum net worth of ₹1,000 crore, with no requirement for scheduled bank status.
4. No minimum net worth requirement, but SFBs must have been in operation for 7 years with scheduled bank status.

Correct answer: A minimum net worth of ₹1,000 crore, scheduled bank status, and a satisfactory performance track record of at least 5 years.

Solution

Under RBI's on-tap licensing framework, an SFB seeking conversion into a universal bank must satisfy specific eligibility norms. These include minimum net worth, scheduled bank status, and a satisfactory performance track record.

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