Almost a decade ago, several founders and promoters of small finance banks applied to the Reserve Bank of India (RBI) for a license to establish universal banks. However, only two of them were successful, with one being merged with the largest small finance bank and the other with a fintech company. The remaining applicants were only able to establish small finance banks. Recently, the RBI released guidelines for small finance banks to voluntarily convert to universal banks, providing a boost to their aspirations. However, at present, only two small finance banks have met the RBI’s eligibility criteria to become universal banks. This milestone marks a significant achievement for these banks, enabling them to expand their operations and offer a broader range of banking services to customers. The successful conversion is expected to have a positive impact on the financial sector, promoting greater financial inclusion and competition in the Indian banking industry.

Source: https://www.outlookbusiness.com/corporate/today-small-finance-banks-are-accepted-in-the-ecosystem-as-regular-banks-suryoday-small-finance-bank-ceo