Small Finance Banks

Small Finance Bank

Banking in India has become one of the fundamental and important pillars of the country. If we want the economic growth of a country, the country must keep the banking system running right from the root level. But did you ever think about the section of an economy which is not being served by other banks? So here are the “Small Finance Banks” which have proved to be the great help for small businesses units. So today we are going to discuss “Small Finance Banks”.

What is ‘Small Finance Banks?

  • The banks which are assumed to step into the financial inclusion by presenting basic banking & credit services like the reception of deposits and lending to the large population is called “Small Finance Banks“.
  • The main purpose is to provide financial inclusion to the part where it is not being served by other banks such as small business units, marginal farmers, micro and small industries and unorganized sector entities.

Key Points

  • RBI grants a license to the small finance bank under section 22 (1) of the banking regulation act
  • Small finance bank can be promoted by professionals with 10 years of experience in Finance or NBFC or Any local area bank
  • Promoter’s initial contribution should be 40% lower to 26% in 12 years
  • Minimum paid-up capital to start the business is 100cr
  • Those banks need to extend 75% of the loan in priority sector (Sectors whose income is not fixed i.e. depending on circumstances e.g. Agriculture Sector)
  • Should have 25% of the bank network in the unbanked sector
  • Should have Banking Correspondent network
  • They can sell forex, mutual funds, Insurance
  • They Can be converted into a fully-fledged ban

List of Small finance Bank & HQ

Sr. No. Bank Name Headquarters
1 AU financer Jaipur
2 Capital Local Area Bank Jalandhar
3 Disha Microfinance private Ltd Ahmedabad
4 Equitas Holding Chennai
5 ESAF Microfinance Chennai
6 Jan-Laxmi Financial Service Bengaluru
7 RGVN Microfinance Ltd Guwahati
8 Suryoday Microfinance Navi Mumbai
9 Ujjivan Financial Services Bengaluru
10 Uttkarsh Microfinance Varanasi

 

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