Small Finance Banks

Small Finance Banks

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RBI has granted approval to 10 small finance banks on 16.09.215. The applicants who got the license among 72 other applicants are:

  1. AU Financiers now AU Small Finance Bank
  2. Capital Local Area Bank now Capital Small Finance Bank
  3. Disha Microfin Pvt Ltd from Ahmedabad now Fincare Small Finance Bank
  4. Equitas Holdings now Equitas Small Finance Bank 
  5. ESAF Microfinance and Investments from Chennai now known as ESAF Small Finance Bank
  6. Janalakshmi Financial Services
  7. Ujjivan Financial Services based in Bengaluru now Ujjivan Small Finance Bank
  8. RGVN (North East) Microfinance based in Guwahati
  9. Suryoday Micro Finance from Navi Mumbai and now Suryoday Small Finance Bank
  10. Utkarsh Micro Finance based out of Varanasi now Utkarsh Small Finance Bank

Functions of Small Finance Banks:

1. The small finance banks will provide basic banking services like accepting deposits and lending to the un-banked areas such as small farmers, micro business enterprises, micro and small industries and unorganized sector entities.

2. There may also be limits on the loan size and the quantum of deposits that such banks can accept.

3.They will be allowed to distribute mutual fund products, insurance products and pension products. 

Benefits of Small Finance Banks

This initiative of RBI is basically aimed at covering unbanked and rural areas under banking arena. Small Finance Banks will be providing all sort of banking facilities to people in rural areas and such areas where nationalized or private banks have not yet established themselves.

This is a big step towards the objective of covering each and every household and individual in India under Financial Inclusion.