SMALL FINANCE BANKS

PRACTICE QUESTION

Q.  Consider the following statements:

1. Small Finance Banks require to extend 75% of their Adjusted Net Bank Credit (ANBC) to the classified sectors under the priority sector lending (PSL) by the RBI.

2. The SFBs are subject to all the prudential norms and regulations of RBI as applicable to existing commercial banks including the requirements related to Cash Reserve Ratio (“CRR”) and Statutory Liquidity Ratio (“SLR”).

3. SFBs must have 40% of its branches set up in unbanked areas.

How many of the above statements are correct?

a. Only one

b. Only two

c. Only three

d. None.

Answer: b. Only two