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WHAT ARE SMALL FINANCE BANKS IN INDIA ? |
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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 .
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 are
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 are
- Au Financiers (India) Limited, Jaipur
- Capital Local Area Bank Limited, Jalandhar
- Disha Microfin Private Limited, Ahmedabad
- Equitas Holdings P Limited, Chennai
- ESAF Microfinance and Investments Private Limited, Chennai
- Janalakshmi Financial Services Private Limited, Bengaluru
- RGVN (North East) Microfinance Limited, Guwahati
- Suryoday Micro Finance Private Limited, Navi Mumbai
- Ujjivan Financial Services Private Limited, Bengaluru
- Utkarsh Micro Finance Private Limited, Varanasi.
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. 75 percent of Adjusted Net Bank Credit to be extended to priority sector
2. 50 percent of loan portfolio to constitute loans & advances of upto Rs 25 lakh
3. 25 percentage of branches must be in unbanked rural areas
4. Maximum loan size & investment limit to single obligor restricted to 10 percent of capital funds
5. Maximum loan size & investment limit to a group restricted to 10 percent of capital funds
6. 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 HERE
Guidelines issued by RBI for operations of the banks are as follows :
1. 75 percent of Adjusted Net Bank Credit to be extended to priority sector
2. 50 percent of loan portfolio to constitute loans & advances of upto Rs 25 lakh
3. 25 percentage of branches must be in unbanked rural areas
4. Maximum loan size & investment limit to single obligor restricted to 10 percent of capital funds
5. Maximum loan size & investment limit to a group restricted to 10 percent of capital funds
6. 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 HERE
WHAT WE CAN EXPECT FROM SMALL FINANCE 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 .
As per RBI licence , new small finance banks are to be set up within 18 months . But it is generally believed that many such licencees may establish their banks much earlier than the stipulated time frame.
As per RBI licence , new small finance banks are to be set up within 18 months . But it is generally believed that many such licencees may establish their banks much earlier than the stipulated time frame.
ACTIVE SMALL FINANCE BANKS
Presently Following Small Finance Banks have started operation .
( 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, Jalandhar
3. SURYODAY SMALL FINANCE BANK : Licence given by RBI to Suryoday Micro Finance Private Limited, Navi Mumbai
4. UJJIVAN SMALL FINANCE BANK : Licence given by RBI to Ujjivan Financial Services Private Limited, Bengaluru .
5. UTKARSH SMALL FINANCE BANK : Licence given by RBI to Utkarsh Micro Finance Private Limited, Varanasi.
6 EQUITAS SMALL FINANCE BANK : Licence given by RBI to Equitas Holdings P Limited, Chennai
7 ESAF SMALL FINANCE BANK : Licence given by RBI to ESAF Microfinance and Investments Private Limited, Chennai .
8 JANA SMALL FINANCE BANK : Licence given by RBI to Janalakshmi Financial Services Private Limited, Bengaluru
( 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, Jalandhar
3. SURYODAY SMALL FINANCE BANK : Licence given by RBI to Suryoday Micro Finance Private Limited, Navi Mumbai
4. UJJIVAN SMALL FINANCE BANK : Licence given by RBI to Ujjivan Financial Services Private Limited, Bengaluru .
5. UTKARSH SMALL FINANCE BANK : Licence given by RBI to Utkarsh Micro Finance Private Limited, Varanasi.
6 EQUITAS SMALL FINANCE BANK : Licence given by RBI to Equitas Holdings P Limited, Chennai
7 ESAF SMALL FINANCE BANK : Licence given by RBI to ESAF Microfinance and Investments Private Limited, Chennai .
8 JANA SMALL FINANCE BANK : Licence given by RBI to Janalakshmi Financial Services Private Limited, Bengaluru
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TAX ON RETIREMENT
MORE THAN 2000 VIEWS IN ITS FIRST WEEK OF PUBLICATION
CLICK HERE TO READ
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LAST DATE FOR FILING INCOME TAX RETURN FOR FY 17-18 IS 31.07.2017
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HOW TO LINK YOUR AADHAR TO PAN ? CLICK HERE
AAYKAR SETHU , NEW MOBILE APPLICATION FOR ALL YOUR INCOME TAX JOBS
PRECAUTIONS WHILE INVESTING
CLICK HERE TO READ
----------------------------------------------------------------------
TAX ON RETIREMENT
MORE THAN 2000 VIEWS IN ITS FIRST WEEK OF PUBLICATION
CLICK HERE TO READ
----------------------------------------------------------------------------------------------------------------
LAST DATE FOR FILING INCOME TAX RETURN FOR FY 17-18 IS 31.07.2017
TO KNOW ALL ABOUT ITR FORMS , CLICK HERE
HOW TO LINK YOUR AADHAR TO PAN ? CLICK HERE
AAYKAR SETHU , NEW MOBILE APPLICATION FOR ALL YOUR INCOME TAX JOBS