Message for Customers – Shivalik Small Finance Bank receives license from RBI
First Urban Cooperative Bank in India to receive a commercial banking license under voluntary transition scheme
Delhi, January 04, 2021
Shivalik Small Finance Bank (SSFB) today announced the receipt of a license from Reserve Bank of India (RBI) to carry on banking business as a Small Finance Bank (SFB) in India. This marks the successful completion of the last major step in the transition of Shivalik Small Finance Bank (SMCB) to a SFB. SMCB is the first Urban Cooperative Bank (UCB) in India to transition to a Small Finance Bank under the voluntary transition scheme.
Shivalik is the first and largest multi-state Urban Co-operative Bank in Uttar Pradesh and has been at the forefront of financial inclusion through a technology focussed approach. It is currently serving customers in Uttar Pradesh, Madhya Pradesh, Delhi and Uttarakhand.
The 22 year old bank serves over 4 lakh unique customers through several customer touch points such as banking outlets, ATMs, internet banking, mobile banking, and doorstep services through hand held devices. As on 31 March 2020, the total business size of the bank was approximately ₹1,800 Crores.
The bank is already live on all significant payment platforms and prides itself in providing a best-in-class digital experience to customers. The bank’s major technology platforms are powered by Infosys Finacle using a cloud native model.
The bank had received an in-principle approval from RBI for transitioning to a Small Finance Bank in January 2020 and was given an 18 month timeline to commence business as a Small Finance Bank. With today’s announcement, the bank is on track to achieve this much earlier than expected. The bank expects to commence business as a Small Finance Bank by April 2021.
Commenting on this, Suveer Kumar Gupta, MD & CEO of Shivalik Small Finance Bank, said, “It is an honour for Shivalik to be the first UCB in India to transition to a Small Finance Bank. A scheduled commercial banking license will alter our identity significantly allowing us to offer banking services across the country, offer a complete range of retail banking solutions to our customers and further our goal of financial inclusion. With a rich 22 year banking heritage and experience, Shivalik is well placed to significantly benefit from becoming a Small Finance Bank. Our vision is to build a new age bank which is digital first and customer oriented at its roots. Shivalik can rapidly innovate and rollout highly personalized products and services for its customers through its advanced technology platform including the ability to implement Open Banking, and easily collaborate with the external ecosystem, including fintechs, digital businesses and non-banking financial service providers. We believe that technology adoption will allow us to explore previously under explored customer segments and expand across the country without reliance on a physical branch network.”
Message for Customers – Transition to a Small Finance Bank (Scheduled Commercial Bank)
On January 6, 2020 Shivalik Small Finance Bank received in principle approval from RBI to transition to a Small Finance Bank (SFB) (a Scheduled Commercial Bank). This has been possible due to your continuous patronage. As of March 31, 2019 thirty-one private commercial banks including ten SFBs were in operation.
The key objectives of setting up of SFBs were for furthering financial inclusion by:
- provision of savings vehicles primarily to unserved and underserved sections of the population, and
- supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.
A major focus of the SFBs will be to provide loans of small ticket sizes with a focus on sectors eligible for classification as priority sector lending (PSL) by RBI.
The Bank envisages the following benefits to customers on transition to a SFB:
- Open branches across any location in India
loans across any location in India
Government and Institutional business
competitive rate of interest on home loans since Bank will become eligible for
refinancing facility from government institutions
- Acceptability of Bank Guarantees and Fixed Deposits offered by the Bank in Government
- Offer investments in mutual funds
- Offer products which allow benefits under the Income Tax Act e.g. super saver fixed
deposits for senior citizens
- To be included in the category of Scheduled Commercial Banks
- Ability to expand at a faster pace
We thank you for your trust and patronage and look forward to your continued support.
Suveer Kumar Gupta
MD & CEO
Transfer of Holding in Shivalik Small Finance Bank to proposed Small Finance Bank
The Members of Shivalik Small Finance Bank Limited “Bank”,
The management of the Bank is pleased to inform you that the Reserve Bank of India has granted in-principle approval to your Bank for transitioning to a Small Finance Bank, on 6 January 2020 in accordance with the RBI’s circular dated September 27, 2018 on the ‘’Voluntary Transition of Primary (Urban) Co-operative Banks (UCBs) into Small Finance Banks (SFBs)”. Consequent to this, the members of the Bank would be transferred to the proposed public limited company i.e. ‘Shivalik Small Finance Bank Limited’ (i.e. new entity) as per the process approved by the Board of the Bank on February 15, 2020 and the General Body of the Bank at its meeting held on March 15, 2020.
In this regard, all members are hereby informed of the following:
i. All existing members of the Bank, who are willing and eligible* to be transferred as shareholders to the Small Finance Bank would be required to submit the following information in the prescribed format of the Bank by
15 June, 2020 (extended from the earlier date of 30th May 2020) by following the instructions in point (iii) :
a. Demat account number
b. Deposit a nominal sum of INR 100 in the nature of Administrative Fees
ii. Any member who is unable to provide the items mentioned above to the Bank by 15 June, 2020 (extended from the earlier date of 30th May 2020) would be deemed ineligible for the transfer.
iii. The instructions for shareholder transfer are as follows:
Step 1: Read the FAQs carefully
Step 2: Fill the online form and download & print the specified consent letter
Step 3: Submit the completed consent letter by email to firstname.lastname@example.org
The last date of submission for requests related to shareholder transfer was 15th June 2020. No further requests are eligible for submission post this date. Accordingly the online form is no longer availbale.
Terms and Conditions
The transition of the Bank into a small finance bank and the eligibility of its members to become shareholders in the Small Finance Bank, shall at all times be subject to
(i) All applicable laws including the Companies Act, 2013, Multi State Cooperative Societies Act, 2002, the Banking Regulation Act, 1949 (read with the rules and regulations made thereunder)
(ii) The circulars, notifications and directions issued by the Reserve Bank of India from time to time
(iii) The bye-laws of the Bank, as may be amended from time to time
(iv) All resolutions passed by the General Body of the Bank in regards to transfer of shareholders and the transition of the bank to a Small Finance Bank.
(v) All decisions made on the transfer requests received by the Bank would be final and any grievances / disputes would have to be brought to the notice of the MD & CEO in writing within 15 calendar days of the deadline for submission of transfer request.
(vi) No submissions will be considered by post or by submitting to the branch.
*Members not eligible for transfer are those that have not availed minimum banking services as per clause 14 of the bank’s bye laws, nominal / associate members as per clause 20 of the bank’s bye laws and borrowers whose loans have been classified as non performing in the 12 month period ending 30 May 2020.
Frequently Asked Questions (FAQs)
- I do not want to transfer my holding in SMCB to the new entity? Do I need to do anything?
You do not need to do anything in case you do not want to transfer your holding in SMCB to the new entity.
- What happens to my holding in SMCB if I do not intend to transfer my holding to the SFB entity?
In case you do not submit the required information by the prescribed deadline, you are not considered eligible for transfer to the new entity. Your shareholding in SMCB will be refunded to you in due course. For borrowing members, the shareholding would be adjusted against the loan principal on the date of transfer.
- When will the proposed transfer of holding in SMCB to the new proposed Small Finance Bank take place?
SMCB received in-principle approval on 6 January 2020. The bank has been given 18 months from this date to transfer its business to the proposed Small Finance Bank (SFB). Therefore, the transfer is expected to occur latest by this time, however, the management team remain confident of completing the transition sooner. In addition, the members must note that the transfer may occur in parts i.e part of the holding in SMCB could be transferred to the new proposed SFB prior to the business transfer.
- Are there any taxation implications of such transfer for members?
Taxation and other regulatory liabilities (if any) arising out of such transfer would solely be the responsibility of the member and the bank cannot be held responsible on any account for all such liabilities. The members are requested to obtain taxation related advice on such transfer from their financial advisors.
- Why is a Demat Account number required?
The proposed Small Finance Bank would be a public company registered under the Companies Act 2013. The Act requires that all shares in a public company be issued in dematerialised form. Therefore, a Demat Account number is essential for holding shares in the proposed company.
- I do not have a Demat Account. Can SMCB assist me with opening of a Demat Account?
SMCB is unable to offer demat account services at present and does not have any partnerships in this connection. Therefore, SMCB is currently unable to assist in the account opening. Members are requested to search online or contact any of the large / leading commercial banks who may be able to provide such services.
- If I submit the information post the deadline, would I still be considered for the transfer?
The general body of Shivalik Small Finance Bank has approved a deadline of 30th May 2020 for such transfer in its meeting on 15 March 2020. This date has been extended to 15 June 2020 for the convenience of our members. Therefore, any submissions after 15 June 2020 would not be eligible for transfer.
- Would the deadline for submission be extended due to COVID 19?
SMCB has created a paperless process for submission of the required information as mentioned at shareholdertransfer.php . Therefore, the members can fill out the information and submit the signed form via email from the comfort of their home. In addition, demat account opening services offered by others continue to operate as part of the essential services category. The last date for submission of details has been extended to 15 June 2020 from the earlier date of 30 May 2020 for the convenience of our members.
- Can I submit the form and provide the Demat Account number later?
All details in the form have to be submitted along with a signed copy by 15 June 2020 (extended from the earlier date of 30th May 2020). Any submissions after this date would not be eligible for transfer.
- What is the purpose of the fee that is to be charged? Is this fee per member or per share?
This fee has been approved by the general body of the bank as an administrative fee to process the transfer requests. It is a nominal amount of Rs. 100 per member.
- I have submitted the form by the prescribed deadline but have not kept my SMCB account funded with the requisite amount for the administrative fee? Am I still considered eligible for transfer?
The bank will attempt to debit the administrative fee on or after 30th May 2020 anytime until end of June 2020. You are requested to maintain the requisite balance in your account during this period. You may be deemed ineligible if the fee is unable to be debited from your SMCB account during this period.
- Can I submit the form in person to the branch or in Head Office?
The form cannot be submitted to the branches. It can be submitted in of the following ways :
- Email : As per the instructions at shareholdertransfer.php
- In person : By submitting to Mr. Akhil Gupta at the Head Office of the bank in Saharanpur