Banking is a personal experience for every individual. If you’re someone looking for the best banking partner over traditional banking services, you are at the right place. There are the top 10 small financial banks (SFB) in India that provide the best banking experience and explorative options for people of all age groups. These small finances are redefining financial inclusion with their innovative approach to serving underbanked segments.
In this blog, we’ll explore the top 10 Small Finance Banks in India and the game-changing impact they’re having on India’s financial ecosystem. Whether you’re an aspiring entrepreneur, a curious investor, or simply someone looking to make smarter banking choices, this blog will help you with your queries.
What is Small Finance Banking?
Small finance banks (SFBs) are specialized banks in India that are designed to provide financial services to those who haven’t been well-served by traditional banks. They often supply to small businesses by offering loans to help them grow, and they design financial products specifically for farmers, such as loans for equipment or seeds. Their core mission is financial inclusion, aiming to reach those in rural areas or unbanked sections of the population who haven’t had access to basic banking services before. SFBs offer essential products like savings accounts, checking accounts, fixed deposits, and loans, acting as financial champions for these underserved communities.
Top 10 Small Finance Banks In India
Given below are the top 10 small financial banks in India which will give you an insight into India’s financial and banking sector.
| Bank Name | Established Year | Headquarters |
| AU Small Finance Bank | 1997 | Jaipur |
| Capital Small Finance Bank | 2000 | Trichy, Tamil Nadu |
| Equitas Small Finance Bank | 2007 | Chennai |
| ESAF Small Finance Bank | 1992 | Kochi, Kerala |
| North East Small Finance Bank | 2017 | Guwahati, Assam |
| Suryoday Small Finance Bank | 2008 | Gurgaon |
| Ujjivan Small Finance Bank | 2005 | Bengaluru, Karnataka |
| Utkarsh Small Finance Bank | 2009 | Lucknow |
| Jana Small Finance Bank* | 2018 | Bangalore, Karnataka |
| Unity Small Finance Bank* | 2021 | Mumbai, Maharashtra |
Highlights Of Small Finance Banks in India
Here’s the summary of the key highlights for each bank you requested:
AU Small Finance Bank:
- They merged with Fincare Small Finance Bank (SFB) in 2020, creating a larger SFB with a wider reach.
- They offer a comprehensive range of financial products including loans, deposits, investment products, and debit cards.
- They are known for its focus on financial inclusion and serving underbanked segments.
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Capital Small Finance Bank:
- They have a primary focus on serving the underbanked segments in rural and semi-urban areas of Tamil Nadu.
- They also offer basic banking products like savings accounts, fixed deposits, and loans tailored to micro and small businesses.
- They are known for its commitment to financial literacy initiatives.
Equitas Small Finance Bank:
- They have started operations in 2007, starting with a strong presence in South India.
- Offers a range of financial products including microfinance loans, small business loans, gold loans, and deposit products.
- Recognized for its focus on empowering women entrepreneurs.
ESAF Small Finance Bank:
- They were established in 1992, as a pioneer in the microfinance sector in India.
- They are known for its microfinance services and loan products targeted towards women entrepreneurs.
- They have a significant presence in Kerala and South India.
North East Small Finance Bank:
- It was the first SFB established in the northeastern states of India (2017).
- They supply the specific financial needs of the region, offering loans and deposit products.
- They play a vital role in promoting financial inclusion in the North East.
Suryoday Small Finance Bank:
- They were established in 2008, with a focus on microfinance, small business loans, and vehicle loans.
- They have a wide network of branches across India, particularly in rural and semi-urban areas.
- They are known for its commitment to financial inclusion and technological innovation.
Ujjivan Small Finance Bank:
- Has started their operations in 2005, a prominent player in the microfinance sector.
- They offer microfinance loans, small business loans, and gold loans.
- They have a strong presence in Maharashtra and other parts of India.
Utkarsh Small Finance Bank:
- They were established in 2009, with a primary focus on serving the states of Bihar, Jharkhand, and Uttar Pradesh.
- They offer microfinance loans, small business loans, and gold loans.
- They are known for its financial inclusion efforts in these underbanked regions.
Roles And Responsibilities Of Small Finances Bank
Small finance banks (SFBs) in India play a crucial role in promoting financial comprehension by providing essential banking services to unserved communities. Here’s a breakdown of their key roles and responsibilities:
Financial Inclusion:
- SFBs focus on geographically remote areas and underbanked segments like small businesses, farmers, and low-income households. They open branches in these regions, making banking services accessible to those who haven’t had them before.
- SFBs offer core banking services like savings accounts, current accounts, and fixed deposits. This allows people to securely save money, access credit, and manage their finances effectively.
Financial Empowerment:
- SFBs often conduct financial literacy workshops and awareness campaigns to educate their customers about saving, borrowing, and managing money wisely.
- By providing affordable credit, SFBs help small businesses grow and create jobs, contributing to local economic development.
- Several SFBs focus on empowering women by offering loan products designed for them and setting up women-centric branches.
Regulation and Compliance:
- FBs are regulated by the RBI and must stand by all banking regulations and guidelines. This ensures the safety and security of customer deposits and promotes responsible lending practices.
- The RBI mandates SFBs to allocate a significant portion of their credit to priority sectors like agriculture, micro and small enterprises, and unorganized sectors. This ensures financial resources reach those who need them most to stimulate economic growth.w
To Wrap Up
Small finance banks (SFBs) have become a crucial player in India’s financial structure. The top 10 small financial banks in India are leading this transformation. Their primary mission is to bridge the gap for the unbanked and underserved segments of the population. SFBs achieve this by extending essential banking services like savings accounts, loans, and money transfers to geographically remote areas and demographics like small businesses, farmers, and low-income households. This targeted approach ensures access to credit that fuels growth in often-overlooked sectors. Furthermore, many SFBs actively promote financial literacy through workshops and awareness campaigns.
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FAQ for Small Finance Banks In India
Q. What are small finance banks in India?
A. Small finance banks in India are specialized banks aimed at providing financial services to underserved sections of society, including small businesses, small farmers, and low-income households.
Q. How are small finance banks different from traditional banks?
A. Small finance banks focus on financial inclusion by providing basic banking services to underserved segments, whereas traditional banks cater to a broader spectrum of customers and offer a wider range of services.
Q. How do small finance banks contribute to financial inclusion?
A.Small finance banks promote financial inclusion by providing accessible banking services, including savings accounts, loans, and insurance, to marginalized and low-income communities.
Q. What are the eligibility criteria for opening an account with a small finance bank?
A.Eligibility criteria typically include proof of identity, proof of address, and meeting any specific requirements set by the small finance bank.
Q. Which is the No. 1 small finance bank in India?
A.AU Small Finance Bank is often considered the No. 1 small finance bank in India based on its size, customer base, and service offerings.
