The Reserve Bank of India (RBI) on Friday released a set of criteria that small lenders need to achieve, including performance metrics and market listing, to become a universal bank and provide comprehensive services to both retail and corporate clients.

The criteria include a five-year track record of satisfactory performance, a net worth of Rs 1,000 crore, meeting capital requirements, recent profitability and limited non-performing assets, the RBI said.

Existing promoters can continue without new additions, and approved shareholding plans will remain unchanged, while diversified loan portfolios are favoured, the central bank said.

Small finance banks face limitations in terms of their customer base and are restricted from granting large loans. Additionally, they are unable to establish subsidiaries.

Eligible small finance banks will have to provide a detailed rationale for the transition, with their application assessed according to specified guidelines, including those for on-tap licensing and shareholding directions.