Reserve Bank of India Grants Licences to set up Small Banks…
The Reserve Bank of India (RBI) granted licences to ten micro lenders to set up small banks to advance loans to the unbanked, small business and farmers, micro and small industries and unorganized sectors which do not have access to finance from the large banks. Of the ten selected firms, eight are microfinance providers, one a local area bank and one a non-banking finance company.
What is a Small Bank?
Small banks are similar to regular commercial banks except that their scale of services will be much smaller. These new type of banks should generate at least 75% of their business from the priority sector (largely agriculture) and mainly from areas where large banks are not present. Besides, 50% of their loans should be of ticket sizes under Rs 25 lakh. Licences for payments banks, which were issued recently on the other hand, are those specialized small banks which can only receive deposits and offer remittance services, but cannot give loans. The payments banks are also not allowed to hold a balance of more than Rs 1 lakh per customer in their bank accounts.
List of firms given licence from RBI:
- A U FINANCIERS
- CAPITAL LOCAL AREA BANK
- DISHA MICROFIN
- EQUITAS HOLDINGS
- ESAF MICROFINANCE & INVESTMENTS
- JANALAKSHMI FINANCIAL SERVICES
- RGVN MICROFINANCE
- SURYODAY MICRO FINANCE
- UJJIVAN FINANCIAL SERVICES
- UTKARSH MICROFINANCE
With Inputs fromThe Times Of India