LIST OF ACTIVE SMALL FINANCE BANKS IN INDIA
   Presently Following Small  Finance Banks  have started operation .Â
  ( CLICK ON THE NAME OF THE BANK TO GO TO THEIR WEBSITE  )
1.  AU SMALL FINANCE BANK   :   Licence given by  RBI  to Au Financiers (India) Limited, Jaipur  .
2. CAPITAL SMALL FINANCE BANK  : ​  Licence given by  RBI  to  Capital Local Area Bank Limited, JalandharÂ
​3. SURYODAY SMALL FINANCE BANK  : ​ Licence given by  RBI  to Suryoday Micro Finance Private Limited, Navi Mumbai Â
4. UJJIVAN SMALL FINANCE BANK  :  ​Licence given by  RBI  to  Ujjivan Financial Services Private Limited, Bengaluru  .Â
5. UTKARSH SMALL FINANCE BANK   :   ​​Licence given by  RBI  to  Utkarsh Micro Finance Private Limited, Varanasi. Â
6 EQUITAS SMALL FINANCE BANK  :   ​​​Licence given by  RBI  to  Equitas Holdings P Limited, ChennaiÂ
7 ESAF SMALL FINANCE BANK  :    ​Licence given by  RBI  to  ESAF Microfinance and Investments Private Limited, Chennai  .Â
​8  JANA SMALL FINANCE BANK   :   ​Licence given by  RBI  to  Janalakshmi Financial Services Private Limited, Bengaluru Â
9 . FINCARE SMALL FINANCE BANK  :  ​Licence given by  RBI  to  Disha Microfin Private Limited, Ahmedabad ​ Â
( Now  merged with AU Small Finance Bank )Â
10 : NORTH EAST SMALL FINANCE BANK : ​ ​Licence given by RBI  to RGVN (North East) Microfinance Limited, Guwahati Â
​11. UNITY SMALL FINANCE BANK : Floated by  the Centrum Group-BharatPe consortium Â
12. SHIVALIK SMALL FINANCE BANK :  Transited from Shivalik Mercantile Co-operative Bank
  ( CLICK ON THE NAME OF THE BANK TO GO TO THEIR WEBSITE  )
1.  AU SMALL FINANCE BANK   :   Licence given by  RBI  to Au Financiers (India) Limited, Jaipur  .
2. CAPITAL SMALL FINANCE BANK  : ​  Licence given by  RBI  to  Capital Local Area Bank Limited, JalandharÂ
​3. SURYODAY SMALL FINANCE BANK  : ​ Licence given by  RBI  to Suryoday Micro Finance Private Limited, Navi Mumbai Â
4. UJJIVAN SMALL FINANCE BANK  :  ​Licence given by  RBI  to  Ujjivan Financial Services Private Limited, Bengaluru  .Â
5. UTKARSH SMALL FINANCE BANK   :   ​​Licence given by  RBI  to  Utkarsh Micro Finance Private Limited, Varanasi. Â
6 EQUITAS SMALL FINANCE BANK  :   ​​​Licence given by  RBI  to  Equitas Holdings P Limited, ChennaiÂ
7 ESAF SMALL FINANCE BANK  :    ​Licence given by  RBI  to  ESAF Microfinance and Investments Private Limited, Chennai  .Â
​8  JANA SMALL FINANCE BANK   :   ​Licence given by  RBI  to  Janalakshmi Financial Services Private Limited, Bengaluru Â
9 . FINCARE SMALL FINANCE BANK  :  ​Licence given by  RBI  to  Disha Microfin Private Limited, Ahmedabad ​ Â
( Now  merged with AU Small Finance Bank )Â
10 : NORTH EAST SMALL FINANCE BANK : ​ ​Licence given by RBI  to RGVN (North East) Microfinance Limited, Guwahati Â
​11. UNITY SMALL FINANCE BANK : Floated by  the Centrum Group-BharatPe consortium Â
12. SHIVALIK SMALL FINANCE BANK :  Transited from Shivalik Mercantile Co-operative Bank
WHAT ARE SMALL FINANCE BANKS IN INDIA ?
      Small finance banks  are a type of niche banks in India. Banks with a small finance bank license can provide basic banking service of acceptance of deposits and lending. The aim behind these to provide financial inclusion sections of the economy not being served by other banks .     Â
Basically  Small Finance banks  would help  small business units, small and marginal farmers, micro and small industries and unorganised sector entities in India.   On 16th September 2015 ,  Reserve Bank of India has  given licence  or in -principle approval  to 10 entities for   opening such banks   out of the 72 applications received . According to a statement by RBI, the in-principle approval granted  is  valid for 18 months to enable the applicants to comply with the requirements under the Guidelines and fulfil other conditions as may be stipulated by them
The ten  companies areÂ
Basically  Small Finance banks  would help  small business units, small and marginal farmers, micro and small industries and unorganised sector entities in India.   On 16th September 2015 ,  Reserve Bank of India has  given licence  or in -principle approval  to 10 entities for   opening such banks   out of the 72 applications received . According to a statement by RBI, the in-principle approval granted  is  valid for 18 months to enable the applicants to comply with the requirements under the Guidelines and fulfil other conditions as may be stipulated by them
The ten  companies areÂ
- Â Au Financiers (India) Limited, JaipurÂ
- Capital Local Area Bank Limited, JalandharÂ
- Disha Microfin Private Limited, AhmedabadÂ
- Equitas Holdings P Limited, ChennaiÂ
- ESAF Microfinance and Investments Private Limited, ChennaiÂ
- Janalakshmi Financial Services Private Limited, BengaluruÂ
- RGVN (North East) Microfinance Limited, GuwahatiÂ
- Suryoday Micro Finance Private Limited, Navi MumbaiÂ
- Ujjivan Financial Services Private Limited, BengaluruÂ
- Utkarsh Micro Finance Private Limited, Varanasi.
LICENCES FOR SMALL FINANCE BANKS
 Guidelines for ‘on tap’ Licensing of Small Finance Banks dated December 5, 2019Â
In " on-tap " licensing  . an applicant can apply to RBI on any time for obtaining licence to operate a small finance bank .  The applications will go through the following  procedure before they get a licence by RBI :Â
​
In " on-tap " licensing  . an applicant can apply to RBI on any time for obtaining licence to operate a small finance bank .  The applications will go through the following  procedure before they get a licence by RBI :Â
​
- At the first stage, the applications will be screened by RBI to assess the eligibility of the applicants, vis-à -vis the criteria laid down in these guidelines. RBI may apply additional criteria to determine the suitability of applications, in addition to the ‘fit and proper’ criteria prescribed at paragraph 3 above. Thereafter, the applications will be referred to a Standing External Advisory Committee (SEAC) to be set up by RBI.
- The SEAC will comprise of eminent persons with experience in banking, financial sector and other relevant areas. The tenure of the SEAC will be for three years.
- The SEAC will set up its own procedures for screening the applications. The SEAC will meet periodically, as and when required. The Committee will reserve the right to call for more information as well as have discussions with any applicant/s and seek clarification on any issue as may be required by it. The Committee will submit its recommendations to RBI for consideration.
- The Internal Screening Committee (ISC), consisting of the Governor and the Deputy Governors will examine all the applications. The ISC will also deliberate on the rationale of the recommendations made by the SEAC and then submit its recommendations to the Committee of the Central Board (CCB) of RBI for the final decision to issue ‘in-principle approval’.
- The validity of the ‘in-principle approval’ issued by RBI will be 18 months from the date of granting ‘in-principle approval’ and would thereafter lapse automatically. Therefore, the -applicant will have to obtain the license within a period of 18 months of granting the ‘in-principle approval’.
- After issue of the ‘in-principle approval’ for setting up of a small finance bank, if any adverse features are noticed regarding the Promoters or the companies / entities with which the Promoters are associated and the group in which they have interest, the RBI may impose additional conditions and if warranted, may withdraw the ‘in-principle approval’.
- The names of applicants that are found suitable for grant of in-principle approval will also be placed on the RBI website.
- An applicant who has not been found suitable for issue of license will be advised of the Reserve Bank’s decision. Such applicants will not be eligible to make an application for a banking license for a period of three years from the date of that decision.
- Applicants aggrieved by the decision of the Committee of the Central Board can prefer an appeal against the decision to the Central Board of Directors, within one month from the date of receipt of communication from RBI relating to the application not being considered as at paragraph 16 (h) above.
- Who can apply for SFB Licence ?Â
1. Resident individuals/professionals (Indian citizens), singly or jointly, each having at least 10 years of experience in banking and finance at a senior level;Â
2. Companies and Societies in the private sector, that are owned and controlled by residents (as defined in FEMA Regulations, as amended from time to time), and having successful track record of running their businesses for at least a period of five years, will be eligible as promoters to set up small finance banks.
3. Existing Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and Local Area Banks (LABs) in the private sector, that are controlled by residents , and having successful track record of running their businesses for at least a period of five years, can also opt for conversion into small finance banks
Who are not eligible to apply ?Â
1. Joint ventures by different promoter groups for the purpose of setting up small finance banks would not be permitted.Â
2. Proposals from public sector entities and large industrial house / business groups, including from NBFCs promoted by them, autonomous boards / bodies set up under enactment of a State legislature, state financial corporations, subsidiaries of development financial institutions, will not be entertained. For the purpose of these guidelines, a Group with assets of Rs.5,000 crore or more with the non-financial business of the group accounting for 40 per cent or more in terms of total assets / gross income, will be treated as a large industrial house / business groups.Â
- What  business a   SFB can do ?  Â
-  The small finance bank can  undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. It can also undertake other non-risk sharing simple financial services activities, not requiring any commitment of own fund, such as distribution of mutual fund units, insurance products, pension products, etc. with the prior approval of the RBI and after complying with the requirements of the sectoral regulator for such products. The small finance bank can also become a Category II Authorised Dealer in foreign exchange business for its clients’ requirements. Â
- Minimum Capital required :Â Â The minimum paid-up voting equity capital for small finance banks shall be Rs.200 crore,
 Small Finance  Banks  are licensed  and  regulated by   Reserve Bank of India . The minimum  capital requirements for such banks is Rs 100  crores  . Promoter stake must be at 40 percent in first 5 years - Promoter stake to be brought down to 30 percent within 10 yrs, 26 percent in 12 years  .Joint ventures are not permitted. Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in India.  Listing mandatory within 3 years of reaching Rs. 500 crore net worth .
 Guidelines issued by  RBI  for operations of the banks  are as  follows :
1. Â 75 percent of Adjusted Net Bank Credit to be extended to priority sectorÂ
2. Â 50 percent of loan portfolio to constitute loans & advances of upto Rs 25 lakhÂ
3.  25  percentage of  branches must be in unbanked rural areasÂ
4. Â Maximum loan size & investment limit to single obligor restricted to 10 percent of capital fundsÂ
5. Â Maximum loan size & investment limit to a group restricted to 10 percent of capital fundsÂ
6. Â CRR, SLR requirement as applicable to existing commercial banks from Day 1
 The draft guidelines  issued by  Reserve  Bank of India on Payment Banks  is available on their website .
 To reach the guidelines . CLICK HERE  . Further RBI , on 06.07.2017 , has issued  compendium of Guidelines to Small Finance Banks  which can be accessed by CLICKING HEREÂ
 Guidelines issued by  RBI  for operations of the banks  are as  follows :
1. Â 75 percent of Adjusted Net Bank Credit to be extended to priority sectorÂ
2. Â 50 percent of loan portfolio to constitute loans & advances of upto Rs 25 lakhÂ
3.  25  percentage of  branches must be in unbanked rural areasÂ
4. Â Maximum loan size & investment limit to single obligor restricted to 10 percent of capital fundsÂ
5. Â Maximum loan size & investment limit to a group restricted to 10 percent of capital fundsÂ
6. Â CRR, SLR requirement as applicable to existing commercial banks from Day 1
 The draft guidelines  issued by  Reserve  Bank of India on Payment Banks  is available on their website .
 To reach the guidelines . CLICK HERE  . Further RBI , on 06.07.2017 , has issued  compendium of Guidelines to Small Finance Banks  which can be accessed by CLICKING HEREÂ
WHAT WE CAN EXPECT FROM SMALL FINANCE Â BANKS ?
 Licences for  Small Finance Banks  are now issued to existing micro finance institutions  which are already in the business of  lending to  small and tiny entities .  But once they establish small finance  banks , they can increase their  loan size  to their customers . And they can also  receive deposits , distribute mutual funds  , insurance products  etc .  Hence  we  can expect competition to increase in the  rural banking  ans existing banks have to gear up to face it . Â
As per  RBI licence , new  small finance  banks were to be set up within 18 months .  Now all the ten licencees have opened their banksÂ
As per  RBI licence , new  small finance  banks were to be set up within 18 months .  Now all the ten licencees have opened their banksÂ
TO KNOW ABOUT PAYMENT BANKS Â , CLICK HEREÂ
PRECAUTIONS WHILE Â INVESTING
CLICK HERE TO READÂ
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TAX ON RETIREMENT
MORE THAN 2000 VIEWSÂ Â Â IN ITS FIRST WEEK OF PUBLICATION Â
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 HOW TO  LINK YOUR AADHAR TO PAN  ?  CLICK HEREÂ
New Updated ArticleÂ
      Â
 TAX PLANNING FOR FY 2023-24 ( AY 2024-25 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​
CLICK HERE TO READÂ
----------------------------------------------------------------------
TAX ON RETIREMENT
MORE THAN 2000 VIEWSÂ Â Â IN ITS FIRST WEEK OF PUBLICATION Â
 CLICK HERE TO READÂ
----------------------------------------------------------------------------------------------------------------
 HOW TO  LINK YOUR AADHAR TO PAN  ?  CLICK HEREÂ
New Updated ArticleÂ
      Â
 TAX PLANNING FOR FY 2023-24 ( AY 2024-25 )Â
Comprehensive  Article on Income tax changes in Rules, Rates , Slabs , Rebates  and EstimationÂ
CLICK HERE TO READÂ
​