Consider the following statements:
1. The minimum paid-up equity capital for small finance banks is Rs. 200 crore, with the promoter's contribution reducing to 26% over 12 years.
2. Small finance banks are exempt from the FDI policy applicable to private sector banks.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question

Consider the following statements:
1. The minimum paid-up equity capital for small finance banks is Rs. 200 crore, with the promoter's contribution reducing to 26% over 12 years.
2. Small finance banks are exempt from the FDI policy applicable to private sector banks.

Which of the statements given above is/are correct?
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

ONLiNE UPSC · Accepted Answer

Statement 1 is correct: Small finance banks require a minimum paid-up equity capital of Rs.200 crore, and the promoter's shareholding must reduce from 40% to 26% within 12 years, as per RBI guidelines.

Statement 2 is not correct : Small finance banks are not exempt from the FDI policy applicable to private sector banks. They must comply with the same FDI rules, which allow foreign investment up to 74%.

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M Question 1	⏱ 0
Consider the following statements: 1. The minimum paid-up equity capital for small finance banks is Rs. 200 crore, with the promoter's contribution reducing to 26% over 12 years. 2. Small finance banks are exempt from the FDI policy applicable to private sector banks. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2