Seeking to promote financial inclusion, the Reserve Bank of India (RBI) on 16 September 2015 granted in principle approval to 10 entities to set up small finance banks. These small finance banks will provide basic banking services to small farmers and micro industries.
The in-principle approvals were granted under the Guidelines for Licensing of Small Finance Banks in the private sector issued on 27 November 2014.
The approval granted includes
• Au Financiers (India) Ltd., Jaipur
• Capital Local Area Bank Ltd., Jalandhar
• Disha Microfin Private Ltd., Ahmedabad
• Equitas Holdings P Limited, Chennai
• ESAF Microfinance and Investments Private Ltd., Chennai
• Janalakshmi Financial Services Private Limited, Bengaluru
• RGVN (North East) Microfinance Limited, Guwahati
• Suryoday Micro Finance Private Ltd., Navi Mumbai
• Ujjivan Financial Services Private Ltd., Bengaluru
• Utkarsh Micro Finance Private Ltd., Varanasi
The approval has been granted within a month of the RBI giving nod to 11 entities for launching Payments Banks. The RBI statement said that the in-principle approval will be valid for 18 months to enable these entities to comply with the requirements under the guidelines on Small Finance Banks.
On being satisfied that the applicants have complied with the requisite conditions laid down by it as part of in-principle approval, the RBI would consider granting them a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act, 1949. Until a regular licence is issued, the applicants cannot undertake any banking business.
The small finance banks can provide basic banking services like accepting deposits and lending to the unbanked sections such as small farmers, micro business enterprises, micro and small industries and unorganised sector entities.
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When: 16 September 2015