Paytm, Airtel Payments Banks may become full-fledged commercial banks; RBI revises guidelines

Popular payment banks such as Paytm Payments Bank and Airtel Payments bank may soon be eligible to become a full-fledged commercial bank with RBI allowing them to apply for the license at will if they meet the criteria. “Payments Banks can apply for conversion into SFB after five years of operations if they are otherwise eligible as per these guidelines,” said RBI. Doing so will also allow them to borrow money from the Reserve Bank and lend to customers. The minimum paid-up voting equity capital or net worth requirement to become a Small Finance Bank shall be Rs 200 crore, while for primary urban co-operative banks, who want to turn into Small Finance Banks will have the initial requirement of net worth at Rs 100 crore, which will have to be increased to Rs 200 crore within five years from the date of commencement of business.