All Government Jobs Are you willing to know the detailed information about Small Finance Banks? Here is the article which provides you the clean and clear information about the Small Finance Banks. Small finance banks are a type of niche banks in India. The aim behind these to provide financial inclusion to sections of the economy not being served by other banks, such as small business units, small and marginal farmers, micro and small industries and unorganized sector entities.
The objectives of setting up of small finance banks will be for furthering financial inclusion by
1) provision of saving vehicles primarily to unserved and underserved sections of the population.
2) supply of credit to small business units: small and marginal farmers; micro and small industries and many others.
However, SFBs can also undertake other non-risk sharing simple financial services activities, not requiring any commitment of own funds, such as the 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 Authorized Dealer in foreign exchange business for its clients’ requirements. However, it cannot set up subsidiaries to undertake non-banking financial services activities.
There will not be any restriction in the area of operations of small finance banks; however, preference will be given to those applicants who in the initial phase set up the bank in a cluster of under-banked States/districts. it is stipulated that at least 25 percent of its branches shall be in unbanked rural centers.
Equitas Small Finance Bank Ltd and Ujjivan Small Finance Bank Ltd have listed entities. Mumbai-based Suryoday Small Finance Bank Ltd, Varanasi based Utkarsh Small Finance Bank and Kerala based ESAF Small Finance Bank Ltd have all started operations by the first half of 2016. North East Small Finance Bank Limited has commenced operations as a small finance bank with effect from October 17, 2017.
