Small Finance Banks in India with its Headquarters
List of Small Finance Banks in India. Small Finance Banks List. Small Finance Banks in India PDF. List of Small Finance Banks in India in Hindi. Small Finance Banks in India with their Headquarters, Name of Chairman & Taglines. If you are preparing for the Banking and Insurance Exams, you will come across a section on Banking and Finance Awareness Section. The “List of Small Finance Banks with its Headquarters” is a very important topic for competitive exams.
Today, we provide you with a concise List of Small Finance Banks with their Headquarters. As per previous years’ exam trend, 3-4 questions are generally asked from this Static Awareness topic so we have compiled the Small Finance Banks in India with its Headquarters in 2023.
What is a Small Finance Bank?
Small Finance Bank (SFB) is a coming-of-age concept introduced to make the Indian banking system stronger and less dependent. It was introduced in 2015 to cater to a certain domain of customers. The following banking awareness study notes elaborate more on the small finance bank in terms of its meaning, objectives, and role in the economy.
- The main objective of the small finance bank is to strengthen financial inclusion by extending basic banking services like deposits and the supply of credit across the country.
- The SFBs are a certain kind of financial institution that provides financial services to the unserved and unbanked areas in India.
- These banks are registered under the Companies Act 2013 as a public limited company.
Small Banks are physical banks whose aim is to provide basic banking products such as deposits and supply of credit, but in a limited area of operation. Their work is to supply credit to small farmers, micro and small industries, and other unorganized sector entities through high technology-low cost operations.
Minimum Capital Requirement For Small Finance Banks In India
Small finance banks are required to have a minimum paid-up equity capital of 200 crore (US $27 million). A small finance bank must continuously maintain a capital adequacy ratio of at least 15% of its risk-weighted assets (RWA), subject to any higher percentage that the RBI may from time to time impose.
This requirement is due to the inherent risk involved. At least 7.5% of RWAs should be allocated to Tier I capital. A maximum of 100% of all Tier I capital should be allocated to Tier II capital. Small financing banks are not typically expected to deal with complex products, hence the Basel Committee’s basic methods will be used to calculate the capital adequacy ratio. Also, check the details of the List Of Small Finance Banks In India 2023 provided above.
List of Small Finance Banks in India
Small Finance Banks in India with its Headquarters |
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Name of the Small Financial Bank | Headquarters | Key People | Tagline |
Au Small Finance Bank Limited(AUBANK) | Jaipur, Rajasthan | Mr. Sanjay Agarwal(CEO & MD) | ‘Chalo Aage Badhe’ |
Capital Lab Small Finance Bank | Jalandar ,Punjab | Sarvjit Singh Samra( MD) | Viswas se Vikas tak’ |
Equitas Small Finance Bank | Chennai, Tamilnadu | PN Vasudevan (CEO & MD) | Its Fun Banking’ |
ESAF Small Finance Bank | Thrissur , Kerala | K. Paul Thomas (CEO & MD) ,Raveendranathan Prabha(Chairman) | Joy of Banking’ |
FINCARE Small Finance Bank Limited(formed from Disha Microfin Limited) | Bengaluru , Karnataka | Rajeev Yadav (CEO & MD) | ‘a new era in smartbanking begins’ |
Jana Small finance Bank Limited | Bengaluru , Karnataka | Ajay Kanwal (CEO) | Likho Apni Kahaani |
North East Small Finance Bank(NESFB)-RGVN Micro Finance Ltd. | Guwahati , Assam | DEEP CHANDRA JOSHI( chairman) ,Rupali Kalita (MD ) | Your Door step Banker’ |
Suryoday Small Finance Bank | Navi Mumbai | Mr. R Baskar Babu (CEO & MD) | A bank of smiles |
Ujjivan Small Finance Bank | Bengaluru, Karnataka | Ittira Davis (CEO & MD) | We belive in your belief |
Utkarsh Small Finance Bank | Varanasi , U.P | Govind Singh(CEO & MD) | Aapki Umeed Ka Khata’ |
Shivalik Small Finance Bank Limited | Noida, Uttar Pradesh | Mr. Anshul Swami | Empowering Tomorrow |
Unity Small Finance Bank Limited | New Delhi | Inderjit Camotra | India’s 1st Truly Digital Bank |
Important features of Small Finance Bank
- NBFC’s , any individual with 10 years of experience in banking can apply for licenses.
- Their target are small businesses and MSMEs.
- They are not allowed to lend the deposited money to big businesses or industries.
- Minimum paid-up equity capital requirement of Rs 100 crore.
- Every small finance bank must have the words “small finance bank” in its name.
- They cannot set up subsidiaries to undertake non-banking financial service activities.
- 75% of its Adjusted Net Bank Credit (ANBC) should be advanced to the priority sector as categorized by RBI.
- They can accept any deposit (savings, current, fixed deposits, recurring deposits) like commercial banks.
- Unlike payment banks, small finance banks will be allowed to lend money also.
- For the initial 3 years, prior approval will be required for branch expansion.
- To give the feel of local bank, their area of operation will be restricted.
- Maximum loan size to a single person cannot exceed 10% of total capital funds; cannot exceed 15% in the case of a
- At least 50% of its loans should constitute loans and advances of up to 25 lakh.
- Small banks can undertake financial services like distribution of mutual fund units, insurance products, pension products, and so on, but not without prior approval from the RBI.
- A small bank can transform into a full-fledged bank, but only after RBI’s approval.
- A fundamental requirement is that it must have 25% of its branches set up in unbanked areas.
You may also like: Payment Banks with their Headquarters, Taglines, & Name of Chairman | Download Free PDF |
Difference between Small Finance Bank and payment Banks
Below, we have mentioned the Difference Between a Small Finance Bank and a Payment Bank based on parameters, objectives, scope, restrictions, etc. It will give a clear picture of the things that set apart Small Finance Bank Payment Bank.
Parameters | Small Finance Banks | Payments Bank |
Definition | Small Finance Banks are financial institutions that want to use routine banking operations to meet the financial requirements of underprivileged groups. | A payments bank functions similarly to other banks but on a smaller scale and without taking on any credit risk. It can do the majority of banking tasks, but it cannot grant credit or advance loans. |
Objectives | By providing credit to small business units, small and marginal farmers, micro and small industries, and other unorganized sector entities, these have been established to promote financial inclusion. | By offering modest savings accounts and payment/remittance services to migrant laborers, low-income households, small enterprises, and other unorganized sector entities, payments banks’ main goal will be to promote financial inclusion. |
Minimum Capital Required | Small finance banks are required to have a minimum paid-up equity capital of Rs. 100 crore. | The payments bank’s minimum paid-up equity capital is Rs. 100 crore. |
Scope | Merely begin all primary banking operations in the underserved area. | Credit cards cannot be issued, however, ATM/debit cards can; mobile banking is available. |
Time Deposit | Both fixed deposit (FD) and recurring deposit (RD) time deposits are accepted. | These do not accept time deposits like FD and RD. |
Loans | They can offer small loans | They cannot offer loans |
Restrictions | There are no limitations on how tiny financial banks can operate. | The payments bank is not permitted to establish subsidiaries to engage in non-banking financial services. |
First Launched | India’s first small finance bank, Capital Small Finance Bank, debuted in 2016. | The RBI granted a payments bank license to Airtel Payments Bank in 2016, making it the country’s first organization to do so. |
Number of banks | As recorded in December 2023, there are 12 small finance banks in India. | As recorded in December 2023, there are 6 payment banks in India. |
Payment Banks & Small Finance Bank- Download Complete Notes PDF
RBI Guidelines for Small Finance Banks (SFBs)
Here are a few guidelines issued by RBI, that oversee the operational aspects of Small Finance Banks. The candidates must note that like any other banks, some provisions like CRR Etc apply to Small Finance Banks.
Guidelines Of RBI: Small Finance Banks | |
Aspect | Details |
Minimum Paid-up Equity Capital | INR 100 crore |
Name Requirement | Must include the words “Small Finance Bank” in the name |
RBI Approval for Financial Operations | Prior approval needed for activities like mutual fund distribution, pension, and insurance products |
Branches in Unbanked Areas | 25% of branches must be in unbanked parts of the country |
Reserve Requirements | Maintain CRR (Cash Reserve Ratio) and SLR (Statutory Liquidity Ratio) |
Priority Sector Lending | 75% of Adjusted Net Bank Credit (ANBC) to eligible priority sectors |
Loan Portfolio Composition | At least 50% of loan portfolio for loans and advances up to INR 25 lakh |
Transition to Universal Bank | Allowed, subject to meeting universal bank capital/net worth requirements |
Business Correspondent (BC) Role | Cannot act as BC for other banks, but can have its own BC network |
Provisions Regulating SFBs: The Small Finance Banks are governed by the provisions of the following Acts:
- Banking Regulation Act, 1949
- Foreign Exchange Management Act, 1999
- Reserve Bank of India Act, 1934
- Payment & Settlement Systems Act, 2007
- Credit Information Companies (Regulation) Act, 2005
- Deposit Insurance and Credit Guarantee Corporation Act, 1961
- Other relevant statutes and directives, prudential regulations, and other instructions and/ or guidance issued by the RBI and other regulators regularly
- Only when the SFBs commence their operations and are found suitable as per Section 42 of the Reserve Bank of India Act, 1934, they will be given the status of of a scheduled bank.
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