Thursday, September 17, 2015

These new 10 Small Finance Banks in India will transform India’s Digital economy


          On the occasion of Ganesh Chaurthi, Reserve Bank of India has announced in principle approvals for 10 Small Finance Banks in India.
          In the next 18 months, these entities have to complete the RBI formalities to obtain full-fledged Small Finance Bank licences.

          The lists of the entities are as under:

  1. Au Financiers (India) Ltd., Jaipur @ http://www.aufin.in/
LEADING CHANGE - Mr. SANJAY AGARWAL NOMINATED FOR THE ERNST & YOUNG (E&Y) ENTREPRENEUR OF THE YEAR AWARD 2014, INDIA
  1. Capital Local Area Bank Ltd., Jalandhar @ http://www.capitalbank.co.in/
Ranked no.1 in Banking sector amongst INDIA’s 100 Best Companies to work for 2015 by 'Great Place To Work' Institute
  1. Disha Microfin Private Ltd., Ahmedabad @ http://www.dishamicrofin.com/customer_stories.php
  2. Equitas Holdings P Limited, Chennai @ http://www.equitas.in/
Business run by microfinance members
  1. ESAF Microfinance and Investments Private Ltd., Chennai @ http://emfil.org/index.php/component/content/article/37-successstories/446-fanciful-life-fierce-determination.html
K. Paul Thomas receives ‘Emerging Kerala CEO Excellence Award 2015’
  1. Janalakshmi Financial Services Private Limited, Bengaluru @ http://www.janalakshmi.com/who-we-are/#story
LIKHO APNI KAHAANI
  1. RGVN (North East) Microfinance Limited, Guwahati @ http://www.rgvnnemfl.com/Case-Studies_1.html
INR 2,290,182,829.00 Loan Outstanding as on Mar 2015
  1. Suryoday Micro Finance Private Ltd., Navi Mumbai @ http://suryodaymf.com/investors.php
Suryoday, the sanskrit word for sunrise, signifies the dawn of a new beginning.
  1. Ujjivan Financial Services Private Ltd., Bengaluru @ http://www.ujjivan.com/html/our_impact.php
Ujjivan has reduced its interest rates on Group Loans by 0.6%
  1. Utkarsh Micro Finance Private Ltd., Varanasi @ http://www.utkarshmfi.com/success.html
ICRA upgraded the grading of Utkarsh to M1 (from M2+) indicating company's ability to manage its microfinance activities in a sustainable manner is the highest.

As on date, only ESAF microfinance has announced on its website the receipt   of RBI in principle approval for Small Finance Bank.

Objectives:
The objectives of setting up of small finance banks will be to further financial inclusion by (a) provision of savings vehicles,
and (b) supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.

Scope of activities:
The small finance bank shall primarily 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.
There will not be any restriction in the area of operations of small finance banks.

Prudential norms :
The small finance bank will be subject to all prudential norms and regulations of RBI as applicable to existing commercial banks including requirement of maintenance of Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR). No forbearance would be provided for complying with the statutory provisions.
The small finance banks will be required to extend 75 per cent of its Adjusted Net Bank Credit (ANBC) to the sectors eligible for classification as priority sector lending (PSL) by the Reserve Bank.
At least 50 per cent of its loan portfolio should constitute loans and advances of upto Rs. 25 lakh.


The small finance bank will be required to use the words “Small Finance Bank” in its name in order to differentiate it from other banks.