Small Finance Banks

  • SFBs are niche banks (banks that focuses and serves the needs of a certain demographic segment of the population).
  • SFBs are scaled down versions of commercial banks, with both deposit-taking and loan making functions.
  • They can supply credit to MSMEs, agriculture and banking services in unbanked and under-banked regions in the country.
  • SFBs can sell FOREX, mutual funds, insurance, pensions and can also convert into a full-fledged bank
  • SFBs was recommended by the Nachiket Mor Committee on financial inclusion.
Who can open a SFB?
  • Resident individuals/professionals carrying 10 years of experience in banking and finance and companies and societies owned and controlled by residents will be eligible to set up small finance banks.
  • SFBs have a minimum paid up capital of Rs.100 crore.

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