In-principle approval to 10 entities by RBI | Fusion - WeRIndia

In order to improve financial inclusion, RBI granted approval to line up small Finance Banks to provide basic banking services to small farmers and micro industries to ten entities along with Ujjivan financial Services and Equitas Holdings.

Other entities to get the Reserve Bank’s approval are Au Financiers (Jaipur), Capital Local Area Bank (Jalandhar), RGVN (North East) Microfinance (Guwahati), Disha Microfin (Ahmedabad), ESAF Microfinance (Chennai), Janalakshmi financial (Bengaluru), Suryoday micro Finance (Mumbai) and Utkarsh micro Finance (Varanasi).

After RBI gave approval to eleven entities for launching Payments Banks, the in-principle approval has been granted within a month. The RBI also gave licenses to two entities — IDFC and Bandhan — to operate full-fledged banks last year.

Out of the two, Bandhan started operations last month. However, in the next month, IDFC Bank is expected to go live. The RBI statement stated that the in order to let these entities adjust to the guidelines on small Finance Banks “in-principle” approval is going to be valid for eighteen months.

The Small Finance Banks will offer basic banking services like accepting deposits and lending to the unbanked sections like small farmers, micro business enterprises, micro and small industries and unorganised sector entities.

The central bank had received 72 applications for setting up small Finance Bank. Samit Ghosh, CEO of Ujjivan money Services stated the banking operation would be started within eighteen months.

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