"Keeping in view the difficulties expressed by various parties, it has been decided to extend the last date of receipt of applications to February 2, 2015," RBI said. The earlier deadline was January 16.

RBI had issued guidelines for licensing for SFBs and Pbs in November. The aim behind setting up of such entires is to deepen financial inclusion and boost saving habits.

Responding to queries from individuals and organisations relating to SBFs, the RBI said promoter (individual) of large business or industrial house cannot act as promoter himself to form a small bank.

It also said there is no such stipulation regarding ideal number of branches a SBF shall have to be eligible for the license.

RBI also clarified the proposed SBFs would be "required" to use 'Small Finance Bank' in its name and the minimum paid-up capital of Rs 100 crore should be readily available at the time of obtaining banking licence.

Also, after setting up of the bank, if the lender proposes to go for an IPO, prior approval of RBI is necessary. While answering questions on Payment Banks, RBI said "there is no cap envisaged on the number of licences proposed to be issued".

PBs are allowed to offer locker and vault facilities. It further said the balance at the close of business on any day should not exceed Rs 100,000 per individual customer in a Payment Bank.

On payment of utility (like power and telephone) bills RBI said this it is not allowed for Payment Banks. The Reserve Bank had received 176 and 144 queries from individuals/organisations relating to Small Finance Banks and Payment Banks.

Among others, existing NBFCs and micro finance lenders would be allowed to set up small finance banks, while large public sector enterprises and big industrial houses would not be allowed to establish such banking entities.

For payment banks, which would not be allowed to undertake lending activities, state-run entities would be eligible to apply.

The proposed niche banking entities will initially be restricted to holding a maximum balance of Rs 1 lakh per individual customer. They will be allowed to issue ATM/debit cards as also other prepaid payment instruments, but not the credit cards.


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