What is the minimum capital requirement for setting up a Small Finance Bank (SFB) in India?

### Concept & Banking Regulations The Reserve Bank of India (RBI) mandates specific paid-up voting equity capital and net worth requirements to ensure the financial stability of banking entities before granting licenses. ### Step-by-Step Solution * **Identify the Entity:** The question asks about Small Finance Banks (SFBs), which provide basic banking services to unserved and underserved sections. * **Recall RBI Guidelines:** The RBI periodically updates its licensing guidelines. Initially, when the SFB guidelines were first released, the requirement was lower. * **Current Requirement:** Under the revised guidelines for 'on tap' licensing of Small Finance Banks in the private sector, the minimum paid-up voting equity capital / net worth requirement was raised to **₹200 crore**. ### Exam Strategy & Shortcut Keep track of RBI's revised minimum capital guidelines. The capital requirement for SFBs was doubled from its original ₹100 crore to ₹200 crore to build stronger financial buffers against risk. ### Common Pitfall Selecting ₹100 crore based on outdated information from when SFB licenses were first introduced. Always use the most current RBI regulatory figures. ### Final Answer Therefore, the correct answer is **₹200 crore**.