The Reserve Bank of India (RBI) on June 6 said it was considering “on tap” licensing for small finance banks.
The central bank said it would issue draft guidelines on the licensing of such banks by the end of August 2019.
“There is a case for more players to be included to enhance access to banking facilities to the small borrowers and to encourage competition,” RBI said in a statement.
RBI added that it would review the performance of payments banks for some more time before considering similar licensing.
The central bank’s monetary policy committee (MPC) cut its repo rate by 25 basis points to 5.75 percent, changing the policy stance to “accommodative” from “neutral”.