Small finance banks are the banks that were categorized and created in India with the objective of emphasizing on financial inclusion by serving the unserved and underserved sections of the Indian population. They also include small business units, small scale industries and many parts of the unorganized sector.
The distinction and success of these small finance banks depends on its key characteristics, these characteristics are as follows –
- Target audience – These small finance banks focus on providing finance to the small farmers, micro as well as small industries and the unorganized sector entities.
- Regulation – Like other commercial banks, these small finance banks are also regulated by the RBI ( Reserve Bank Of India) under the banking regulation act, 1949. The small finance banks are special because they are created only to work on financial inclusion.
- Offer products and services – The small finance banks offer not only the basic banking services such as loans and deposits, but they also provide micro credits and customized financial products.
- Capital Requirements – They are required to maintain a minimum capital adequacy ratio.
- Ownership – These small finance banks can be promoted by individual or professionals who have knowledge of finance and banking, or even by companies and societies.
Let us introduce you to the top 10 small finance banks in India which are as follows :-
- AU Small Finance Bank – Au small finance bank is the most eminent small finance bank in India. It was started as Au financers limited in 1996, merely as a vehicle finance company, which now majorly emphasizes on providing financial support to the unserved and underserved population of India. Au small finance bank serves micro, small and medium enterprises and low- income individuals in the rural and semi-urban parts of the country. This bank offers various products and services such as, current accounts, saving accounts, fixed deposits, personal loans, etc.
- Equitas Small Finance Bank – Equitas holdings limited, the parent company of Equitas small finance bank was established in 2007 as a microfinance institution. It started operating as a small finance bank after receiving approval from the Reserve Bank Of India in 2016. This small finance bank offers a wide range of products and services that are tailored to meet the costumers needs and to promote financial inclusion.
- Ujjivan small finance bank – Ujjivan small finance bank is a scheduled bank based out of Bangalore . This small finance bank serves the unbanked sectors of the country. It offers a broader range of financial services and products to the costumers. It mainly provides services such as saving accounts, fixed deposits, loans, etc.
- Jana small finance bank – Jana small finance bank is another small finance scheduled bank. It has its headquarter at Bangalore. It provides wide range of financial services with the purpose of promoting financial inclusion in India. Basically, this small bank offers comprehensive banking solutions to the customers.
- Suryoday small finance bank – Suryoday small finance bank was a microfinance institution before it got the small finance bank license from the Reserve Bank of India (RBI). It is a scheduled bank based in Navi Mumbai, India. Like other small finance banks, this small finance bank too offers range of financial products and services to the urban and rural population of India, it is tailored to meet the needs if the customers.
- Utkarsh small finance bank – Utkarsh small finance bank is a licensed small finance bank granted by the Reserve Bank of India to expand its services and reach maximum population. This small finance bank has its headquarter at Varanasi, Uttar Pradesh, India. It offers financial and banking services to the unserved and underserved parts of the country.
- Fincare small finance bank – Fincare small finance bank was initially operating as a microfinance institution, later it got transformed into a small finance bank based in Bangalore, Karnataka, India. It serves the underbanked and unbanked segments of the populationpopulation, including some micro, small and medium enterprises. It aims at promoting financial inclusion.
- ESAF small finance bank – ESAF small finance bank is a scheduled bank based in Thrissur, Kerala, India. It focuses on meeting the financial needs of the underbanked and unbanked segments of the country, including the micro, small and medium enterprises. Like other small finance banks, ESAF small finance bank also emphasizes on financial inclusion.
- Capital small finance bank – Capital small finance bank is a scheduled bank based in Jalandhar, Punjab, India. This small bank offers various products and services such as, current accounts, saving accounts, fixed deposits, personal loans, etc.
- North East Small finance bank (NESFB) – NESFB is a scheduled bank headquartered at Guwahati, Assam, India. It was established to serve the specific financial needs of the North Eastern Region of India which includes Assam, Arunachal Pradesh, Mizoram, Manipur, Nagaland and Tripura. It provides banking services to the micro, small and medium enterprises, low income groups and rural communities in these unserved areas.
