Reserve Bank of India has recently stated that Shivalik Small Finance Bank has commenced operations as a small finance bank with effect from April 26, 2021. RBI has issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949 to carry on the business of small finance bank in India. Thus, it has become India’s first Urban Co-operative Bank (UCB) to transition to a Small Finance Bank (SFB). The in-principal approval gave SMCB 18 months’ time to commence the business.
As per the scheme, the minimum net worth of the proposed SFB was set at Rs. 100 crore and the minimum capital adequacy ratio of 15% from the date of commencement of business. According to its annual report, Shivalik Mercantile Cooperative Bank’s net worth stood at Rs. 77.21 crore and the capital adequacy ratio was at 13.07% as on March, 2019.
Shivalik Mercantile Cooperative Bank is registered under the Multi-state Cooperative Societies Act, 2002 and operates through 31 branches across Uttar Pradesh, Madhya Pradesh and Uttarakhand. It acquired two Madhya Pradesh-based cooperative banks in 2010 and 2012.