The Reserve Bank of India (RBI) on Friday came out with guidelines for the voluntary conversion of small finance banks (SFBs) into universal banks. The “Guidelines for ‘on-tap’ Licensing of SFBs in Private Sector”, dated December 5, 2019, provide a transition path for SFBs to become universal banks. “Such conversion shall be subject to the SFB’s fulfilling minimum paid-up capital/net worth requirement as applicable to universal banks, satisfactory track record of performance as an SFB for a minimum period of five years, and the RBI’s due diligence exercise,” the banking regulator said a release, stating that these instructions are issued in exercise of the powers conferred on the RBI under Section 22 (1) of the Banking Regulation Act, 1949.