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Top 10 Small Finance Banks in India

Small finance bank

The Great Indian Bank Job: Small is the New Big

You know that feeling when someone tries to sell you a bridge in Brooklyn? That’s exactly how I felt reading last year’s headlines proclaiming India had achieved the coveted “developed nation” status, courtesy of some bureaucrats in the USA. Don’t get me wrong, I’m proud as a peacock of the strides we’ve made as a nation. But let’s call a spade a spade – announcing we’ve “arrived” before lakhs of our citizens even have a basic bank account is putting the cart before the horse doesn’t even begin to cover it. 

It’s like showing up to your pal’s wedding in a fancy suit before you’ve even gotten him a gift, paid for the suit, or heck, even been invited to the blasted wedding! Despite the lofty Pradhan Mantri Jan Dhan Yojana scheme’s best efforts to get all Indians access to basic banking services, the reality is over 27 crore of our brothers and sisters still don’t have so much as a safe place to stash their hard-earned rupees.

But it gets worse, bhai log. Even among those who did manage to open an account, a jaw-dropping 38% saw absolutely zero activity for an entire calendar year! No withdrawals, no deposits, no nou-nou. Just a humble khata sitting there gathering dust like an unemployed uncle at a village nukkad. It’s enough to make your blood boil, na?

The Davids Taking On the Bankingwal Goliaths

Clearly, we’ve still got miles to travel on this financial inclusion front before we can truly hold our heads high as an “inclusive” developed economy. And that’s where a ragtag bunch of young gunners – the small finance banks handpicked by the Reserve Bank of India – have stepped up to the battlefield.

These plucky upstarts are carrying the torch of economic empowerment to those very same underbanked and unbanked regions that big-shot traditional lenders can’t be bothered with. From remote rural hamlets to dusty dhanis, they’re bringing basic banking solutions to the masses….one village at a time.

So lend me your eyes for a few minutes as we run through a quick roll call of the top 10 small finance banks showing the big kahunas of Indian banking how it’s done. Whether you’re an aspiring entrepreneur thirsting for that elusive loan sanction or just an aam aadmi looking for a safe place to park your hard-earned moolah, this is the SFB supremacy list you need to know!

#10 North East Small Finance Bank – The Frontier Force

Headquartered: Assam 

Founded: 2016

Formerly known as the northeast wing of L&T Finance, this SFB is doing yeoman service extending credit lines to businesses, farmers and rural entrepreneurs in some of India’s most remotely populated hinterlands. From Nagaland to Meghalaya, if you’re looking to grow turmeric, finance a piggery operation or just need some quick cash for development, the NESFB is your home base.

Asset products offered include business loans from 5 to 25 lakh, personal loans for salaried folk, and innovative credits like loans against future rent receivables or for upskilling purposes. It’s tailor-made financial inclusion for the neglected but industrious good folks of the North East.

#9 Ujjivan Small Finance Bank – The Everyman’s Bank

Headquartered: Bengaluru

Founded: 2017  

Trust Ujjivan to live up to its name (meaning “livelihood” in Sanskrit) by bringing basic banking services to the masses. From micro-loans for entrepreneurs to plain ol’ savings accounts, this SFB is delivering full-family banking solutions that are simple, accessible and affordable. 

Their core micro-banking vertical extends both group and individual loans along with remittances, insurance and other financial services. This year, they even rolled out special Government-backed schemes like the PM SVANidhi street vendor loans and rural gold loans. On the tech front, Ujjivan has partnerships with Airtel Payments Bank and PayNearby to enable seamless cash transactions through an assisted model.

For rural customers, there are products like the Kisan Pragati card that extend crop loans and other agriculture finance through farmer collectives. The bank has also been aggressively launching alternative doorstep channels like its “Money Mitras” to service face-to-face banking needs of the underserved hinterlands.

So whether you need a quick top-up for your small biz or just want to use basic banking services without schlepping to the nearest town, Ujjivan’s neighborhood Nanis and Radheys have got your back!

#8 Suryoday Small Finance Bank – The Friendly Neighborhood Bank 

Headquartered: Mumbai

Founded: 2008 (as a micro-finance institution)

You know that warm, fuzzy feeling you get while banking with someone who really knows your name? That’s the vibe Suryoday Small Finance Bank is cultivating as it extends sustainable credit to underbanked segments across India. Born as a micro-finance outfit in 2009, Suryoday (literally meaning “sun-rise”) has embraced a customer-centric philosophy of providing financial services tailored to each person’s unique needs and circumstances.

The bank’s flagship inclusive finance vertical extends loans to joint liability groups, affordable housing finance, secured business loans, micro-enterprise finance and much more. But don’t go thinking this is just another small-ticket lender – Suryoday is playing with the big bank bullies by scaling up product offerings for MSMEs, home loans and wholesale clients as well.

At its core though, the bank lives up to its name by “rising” as a supportive partner committed to sharing both good and bad times with its customers. Now that’s the kind of banking relationship every common person can warm up to!  

#7 Capital Small Finance Bank – The Neighborhood Champions

Headquartered: Jalandhar 

Founded: 2000 

When Capital transformed from a local area bank to India’s first small finance bank in 2016, it was a big moment for the mustard fields of Punjab. After all, here was a homegrown lender that had already built trust by delivering basic banking services to communities often ignored by bigger players.

Post the SFB transition, Capital has replicated this grassroots connection at scale by focusing on institutional lending to small borrowers across agriculture, retail and MSME segments. The iconic Kisan Credit Card with its crop loan facilities continues to be a flagship product, augmented by working capital and project finance for village-level entrepreneurs and mom-and-pop businesses.

Despite its small size, Capital is also able to deliver big-ticket third party products and services by partnering with insurance giants, money transfer operators and even that holy grail for rural Indians – foreign inward remittances! The promoters’ vision is to create a cooperative-style “bank of the masses, for the masses” and products are designed to be affordable and accessible.

So if you’re a proud Jatt looking for an all-weather pardesi saheli to bankroll your rural ventures, Capital just might be the SFB soulmate you were waiting for!

#6 Jana Small Finance Bank – The Inclusive Disruptors

Headquartered: Bengaluru

Founded: 2008 (as Bharatha Swamukti Samsthe)

In the jungle of microfinance institutions and small bankers vying for the “financial inclusion” tag, the team at Jana Small Finance Bank has been refreshingly upfront about embracing the underbanked as a target segment. Formerly known as Bharatha Swamukti Samsthe (the organization for self-reliance), Jana was one of India’s earliest for-profit micro-finance institutions.

Today, as a fully-fledged small finance bank, it claims the unique distinction of having the second-most geographically diversified portfolio of loans and branches across the length and breadth of India. From Punjab to Pondicherry, Jana is committed to taking basic banking services to the farthest corners of the country where even big players fear to tread.

Central to its mission is Saghamithra, the bank’s flagship urban microfinance program that extends loans, savings and insurance products to the unbanked working classes residing in cities and towns. But JSFB’s hunger for holistic financial inclusion keeps it focused on rural entrepreneurship as well, with specialized schemes like dairy finance, agri-loans, and credit for allied rural activities.

While customer-centricity is the buzzword for many banks these days, Jana has democratized it by extending financial instruments in multiple regional languages and imparting financial literacy to the masses. With a zeal that matches its name (meaning “people” in Sanskrit), this SFB is scripting a truly inclusive “banking for all” story!

#5 ESAF Small Finance Bank – The Green Changemakers  

Headquartered: Kerala

Founded: 1995 (as a non-profit)

When your founding philosophy is centered on the “triple bottom line” of people, planet and prosperity, you’ve got to walk the talk from day one. And that’s exactly what the team at ESAF Small Finance Bank has been doing ever since its inception as a non-profit organization back in 1995.

Standing for “Evangelical Social Action Forum”, ESAF began by extending micro-enterprise development initiatives before transitioning into a full-fledged small finance bank in 2016. Even today, it remains one of the few players putting environmental and social impact at the core of its business practices.

In line with this philosophy, the bank has instituted a formal Environmental, Social, and Governance (ESG) policy framework focused on promoting financial inclusion, ensuring environmental protection, accountability and sustainable growth. So whether it’s microloans for women entrepreneurs or farm financing for eco-friendly agricultural practices, you can count on ESAF to further the causes it preaches.

That’s not to say ESAF is just another hippie lender with delusions of grandeur. With verticals spanning vehicle loans, SME finance, commercial loans and thriving third-party partnerships, this SFB has the muscle to compete with bigger players. But what sets it apart is a conscious commitment to “do good” over just “doing well.”  

ESAF’s recently launched Hrudaya deposit program is a prime example – it quite literally allows customers to bank in a way that financially uplifts the underserved segments they cater to. Now that’s one version of an “impact investment” scheme I can get behind!

#4 Utkarsh Small Finance Bank – The Grassroots Growth Drivers

Headquartered: Varanasi 

Founded: 2017

When your core operating philosophy is “sustainability” and you’ve got baked-in grassroots connect spanning decades as a microfinance outfit, you’re uniquely positioned to catalyze inclusive economic growth from the bottom up. That’s Utkarsh Small Finance Bank’s playbook in a nutshell as it expands financial services across the hinterlands of northern and central India.

As India’s first SFB headquartered in the ultra-prioritized PM’s constituency of Varanasi, USFB has inherited strong regional goodwill and keen understanding of what works in these often-ignored geographies. The bank’s extensive suite of asset products covers the entire credit lifecycle – starting from microbanking group loans and affordable home finance to wholesale lending for larger investment purposes.

But what really sets Utkarsh apart is its unwavering focus on catalyzing sustainable entrepreneurship and asset creation across the underbanked economic pyramid. A commercial vehicle loan from USFB doesn’t just help a truck driver switch vehicles, it hands him the keys to gradually grow his transport business and create multiplier employment opportunities for others like him down the line. Similarly, the bank’s MSME financing vertical is laden with tailored offerings like supply chain finance and working capital support to equip micro-enterprises for growth.

Basically, USFB doesn’t view financial inclusion as some corporate social responsibility box to be ticked. It’s an intrinsic part of the bank’s grassroots empowerment agenda of creating inclusive growth from the ground up – one loan, one enterprise at a time. 

#3 Fincare Small Finance Bank – The Digital Disruption Drivers

Headquartered: Bengaluru

Founded: 2017  

Old school financial inclusion tactics meet new-age digital disruption – that’s the refreshing duality driving growth at Fincare Small Finance Bank as it doubles down on tech-driven solutions to reach the underbanked masses.

Born out of a merger between two well-known microfinance NBFCs, Fincare punched way above its weight by bagging a coveted SFB license from the RBI in 2017. And it’s been a no-holds-barred digital transformation story for the upstart ever since.

Take its video KYC solution for instance – a feature that allows customers to complete full Know-Your-Customer account activations from the comfort of their homes without having to visit a branch. Then there’s the AI-powered, multilingual bot interface powering WhatsApp banking operations to converse with users in their native tongues!

But Fincare’s digital offering goes way beyond just funky UI/UX features. Take its recently launched tablet banking solution that allows customers to avail doorstep gold loan services including disbursement, collections and renewals – a powerful convenience multiplier in a category that often mandates trip after trip to the neighborhood branch. 

The Fintegration Champions have clearly hit the ground running, bringing simple, intuitive and inclusive fintech solutions to the masses often overlooked by traditional banks. And that’s music to the ears of the digital-first, experience-seeking millennial customers of today.  

#2 Equitas Small Finance Bank – The Original Harbingers

Headquartered: Chennai  

Founded: 2016

If any small finance bank deserves the tag of being the “original harbinger” of this inclusive banking revolution, it has to be Equitas. This SFB was among the very first off the blocks when the RBI opened the licensing window in 2015.

And boy, have they capitalized on that precious first-mover advantage! Despite its relatively younger vintage, Equitas has rapidly scaled up its presence across segments like microfinance, vehicle finance, housing loans, MSME funding and even corporate lending over the past few years.

But don’t go thinking this is just another me-too lender chasing growth at all costs. Equitas has been a trailblazer in using innovative business practices to lend to traditionally underserved segments like private transport owners, microentrepreneurs and rural homebuyers.

Their industry-first “Gunawat” doorstep service model deploys dedicated feet-on-street agents to nurture robust relationships with borrowers at the grassroots level. Similarly, the bank’s ability to underwrite risk by blending conventional data with modern alternative sources like GPS insights and payment trails, has allowed it to create highly customized credit products tailored for niche customer segments.  

So whether you’re a hard-working truck driver yearning to upgrade to a swankier rig or a feisty woman micropreneur looking to grow your flourishing household business, Equitas‘ original-ink financing solutions have got your back!

#1 AU Small Finance Bank – The Pedigreed Professionals  

Headquartered: Jaipur

Founded: 1996 (as a non-banking finance company)

They might have been late entrants to the small finance banking arena, having bagged their license in 2016. But make no mistake – AU Small Finance Bank is the warhorse in this territories’ lineup, riding solely on the sheer weight of over two decades’ worth of operational experience and institutional pedigree.

The bank’s origin story reads just like the quintessential Indian entrepreneurial dream – starting off as a modest non-banking finance company extending vehicle loans to Rajasthan’s frontier towns and villages. Over time, AU graduated to pioneering innovative product lines like used car loans, housing finance for the underserved, and funding for small road transport operators.  

In other words, even before the whole “financial inclusion” narrative went mainstream, AU had been doing the rounds, banking the unbanked and democratizing access to credit at the grassroots level. In keeping with this proud legacy, the bank’s small finance foray has been among the most conventional ones – keeping an active focus on vernacular retail segments like vehicle loans, affordable housing credit and MSME finance.

So if you’re looking for that perfectly balanced combination of courteous small-town relationship banking and decades of institutional trust, AU Small Finance is the pedigreed professional that deserves pride of place on your pitara!

The Long Road to Ubiquitous “Poori-Banking”

There you have it, like literal masaledaar biryani, the top 10 small finance banks doling out spice-loaded feisty servings of financial empowerment across the nook and corner of this vast, underbanked nation we call home. From piggery loans in India’s turned east to cola-truck finance in the baked lands of Rajasthan, these money mercharis are ensuring no dream goes unlended.

Of course, the sector still has miles to go and proverbial bridges to cross before it can declare true “mission accomplished” on the financial inclusion frontier. Attracting sustainable low-cost deposits, deepening reach in rural hinterlands and evolving digitally-driven business models will be key priorities. As will finding that perfect “glocal” balance of standardized policies with the hyper-local market. 

But if this inspiring bunch of upstarts is any indication, the revolution to make neighborhood gullies and mohallas India’s newest banking avenues has well and truly begun! Here’s hoping every Indian from Surat to Srikakulam soon gets invited to the great “Poori banking” party.

So strap in folks, this Small Finance hustle is about to get bigger than big. Frankly, it’s the kind of inclusive economic revolution that has transformative power to uplift millions from poverty and propel the Indian growth story into its next epic chapter.

As these neighborhood niche bankers go forth democratizing access to credit and basic banking services, they’re not just putting rupees and praise in the hands of the underserved. They’re empowering dreams, catalyzing entrepreneurship, and fueling grassroots wealth creation in a way that’s both sustainable and inclusive. 

From the street-side chaatwala getting microfinance to expand his business, to the marginal farmer finally securing institutional credit to boost yields – the true wealth these SFBs are sprinkling is that of unshackling human potential across Bharat’s hinterlands. It’s economic freedom being delivered – one affordable loan, one basic bank account at a time.

So don’t be surprised if this motley crew of small-sized bankers ends up playing a disproportionately big role in realizing our nation’s vision of becoming a $5 trillion economic juggernaut over this decade. After all, when you lend wings to the ambitions of over 60 crore financially underserved Indians, alleviating poverty and catalyzing equitable growth won’t just be pipe dreams. They’ll be natural byproducts of making basic banking services a birthright, not a privilege.

The small finance revolution has arrived, Indians. And by backing these little-engines-that-could wholeheartedly, we just might end up getting “developed nation” bragging rights for real this time around!


1. What exactly is a Small Finance Bank (SFB)?

Small Finance Banks are a type of niche banks in India focused on providing basic banking services and credit to underserved and unbanked segments like small businesses, micro-industries, marginal farmers, and low-income households. They operate on a smaller scale compared to full-fledged commercial banks.

2. How are SFBs different from traditional banks? 

Unlike commercial banks, SFBs have a specific mandate to enable financial inclusion by directing at least 75% of their lending toward priority sectors like agriculture, micro enterprises, affordable housing etc. They also have to open 25% of branches in unbanked rural areas.

3. Who can promote an SFB in India?

The main promoters eligible to set up SFBs are resident individuals/professionals with 10+ years of banking experience, private companies/societies with a proven 5-year track record, and existing players like microfinance institutions or local area banks.

4. What is the minimum capital requirement for SFBs?

The promoters have to maintain a minimum paid-up capital of Rs. 200 crore, with initial capital of at least Rs. 100 crore. The promoters also have to contribute at least 40% of the paid-up capital initially.

5. Can SFBs lend and accept deposits like normal banks?

Yes, SFBs are allowed to carry out most basic banking activities like accepting deposits and extending loans. However, they have certain restrictions like a cap on maximum loan size and inability to participate in private/investment banking activities.

6. What are the main products and services offered by SFBs?

Common offerings include savings/current accounts, fixed/recurring deposits, microfinance group loans, SME/MSME credit, affordable housing loans, vehicle loans, agricultural finance, insurance/mutual fund distribution and remittance facilities among others.

7. Are deposits in SFBs as safe and insured as big banks?

Deposits in SFBs are covered under the same Deposit Insurance and Credit Guarantee Corporation (DICGC) scheme that insures deposits up to Rs. 5 lakh in all commercial banks. So they are just as safe.

8. How is the reach and penetration of SFBs currently?

As of 2023, there are 10 operational SFBs in India with a combined network of over 2,800 branches across the country serving over 2 crore customers, rapidly expanding their footprint in rural and semi-urban areas.

9. What are the future prospects for the SFB sector?  

With their focused lending strategy and “phygital” banking models, SFBs are well-positioned to drive the next wave of financial inclusion and enterprise credit in India’s hinterlands. Many are now scaling up by introducing new products and partnerships.

10. How can a customer open an account with an SFB?

Most SFBs have websites and apps that allow digital/remote account opening processes. Customers can also simply walk into the nearest branch with basic KYC documents and get accounts opened hassle-free.

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