Suryoday and Utkarsh Small Finance Bank begin operations: RBI
Almost two years after the government granted 10 banks licences to set up small finance banks, Suryoday and Utkarsh Small Finance Bank Limited began operations on Monday, Reserve Bank of India said in a report.
Both Utkarsh Small Finance Private Limited in Varanasi and Suryoday Small Finance Bank Ltd in Navi Mumbai were part of the 10 applicants which were issued in-principle approval for setting up a small finance bank in September 2015.
RBI provided the banks in-principle nods to commence operations under Guidelines for Licensing of Small Finance Banks in the private sector issued on November 27, 2014.
The first small finance bank to commence operations was Capital Small Finance Bank, headquartered in Jalandhar and had a total of 57 branches back in August 2016.
Among the other banks that got an in-principle approval from RBI were:
1. Au Financiers (India) Ltd., Jaipur
2. Capital Local Area Bank Ltd., Jalandhar
3. Disha Microfin Private Ltd., Ahmedabad
4. Equitas Holdings P Limited, Chennai
5. ESAF Microfinance and Investments Private Ltd., Chennai
6. Janalakshmi Financial Services Private Limited, Bengaluru
7. RGVN (North East) Microfinance Limited, Guwahati
8. Suryoday Micro Finance Private Ltd., Navi Mumbai
9. Ujjivan Financial Services Private Ltd., Bengaluru
10. Utkarsh Micro Finance Private Ltd., Varanasi
The “in-principle” approval granted would be valid for 18 months to enable the applicants to comply with the requirements under the guidelines and fulfil other conditions that were stipulated by the RBI.
The committee set up to review financial sector reforms in 2009 had opined that there was sufficient change in the environment to warrant experimentation with licensing of small banks.
It recommended allowing more entry to private well-governed deposit-taking small finance banks (SFBs) offsetting their higher risk from being geographically focussed by requiring higher capital, a strict prohibition on related party transactions, and lower allowable concentration norms.
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.