The Reserve Bank of India (RBI), on November 28, 2025, reissued and consolidated its framework for “on-tap” licensing of universal banks in the private sector, updating eligibility, corporate-structure and prudential norms. The document recalls the move from a ‘stop-and-go’ to a continuous authorisation approach, sets out definitions (promoter, promoter group, shell bank, SBO), and explains when a Non-Operative Financial Holding Company (NOFHC) is required. It also requires new banks to be technology-driven, maintain strong customer-grievance mechanisms, and comply with extant statutes and RBI directives.
The prescribes minimum capital and shareholding rules: initial and ongoing net worth of ₹1,000 crore, a minimum CRAR of 13% for three years, promoter/promo-group minimum 40% voting equity locked in for five years (with staged dilution to 26% over 15 years) and mandatory listing within six years. Eligibility and ‘fit and proper’ criteria require promoters (individuals, groups or NBFCs) to have at least 10 years’ successful track record; shell banks and certain group structures are disqualified; and detailed project reports, business plans and dilution schedules must be submitted. Exposure, governance and conflict-of-interest norms (including limits on exposures to promoters and related entities) and priority-sector and rural-branching obligations are emphasised.
The explains the application and decision process: applications via PRAVAAH (Form III) with Annex I attachments, screening by RBI, referral to a Standing External Advisory Committee (SEAC), review by an Internal Screening Committee, and final approval by RBI’s Committee of the Central Board; in-principle approvals are valid for 18 months. The Guidelines also set rules for voluntary transition of Small Finance Banks to universal status (minimum five-year track record, listing, ₹1,000 crore net worth, profitability and tight asset-quality thresholds) and enumerate additional requirements for NBFCs converting to banks.
[Notification No. RBI/DOR/2025-26/143]
