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Top 10 Small Finance Banks in India

Small finance bank

Millions of people around the nation celebrated a year ago when the US designated India as a “Developed Nation.” The fact that India, which is not yet a developed nation, will suddenly have to bear the burden of one leaves far less cause for celebration.

Do not be deceived by these claims, particularly when it comes to financial inclusion or exclusion, since India continues to be the 24th-most unbanked country in the world as of 2021.

In this post, we examine the Small Finance Banks list(SFB), a company established to deal with these issues.

Unfortunately, despite the Pradhan Mantri Jan Dhan Yojana’s greatest efforts, India nevertheless managed to earn this notorious rating (PMJDY) More than 27.32 billion Indians lack a bank account.

Additionally, more than 38% of the lucky people’s bank accounts remain dormant. This indicates that there were no withdrawals or deposits from these accounts for a whole calendar year.

However, our leaders have always championed financial inclusion. In order to solve this issue alongside the RBI, the then-finance minister initiated an experiment with small banks in 1996. Local Area Banks (LAB) were established as a result. These banks wanted to have a strong presence in rural and semi-urban areas.

In order to address financial exclusion, the RBI started to take a significant role in 2014 and by 2015 had published a list of 10 organisations that had been granted a licence to operate as Small Finance Banks (SFB).

What are Small Finance Banks?

Small Finance Banks (SFBs) are financial organisations with the main goal of promoting financial inclusion by offering banking services to underserved and unbanked areas of the nation.

Small businesses, small farms, microbusinesses, and other unorganised organisations are among those whose needs are also met by SFBs.

These banks offer the fundamental financial services typically provided by commercial banks to their target areas and are registered as public limited companies under the Companies Act, 2013.

These banks’ primary goals are to increase access to financial services in rural and semi-urban regions (tier 3 and tier 4 cities), which would otherwise be denied by commercial banks when it comes to loans and other financial services.

As a result, SFB also focuses on providing credit facilities to unorganised sector organisations such as small businesses, micro and small businesses, and small farmers.

What qualifications must promoters meet in order to be eligible?

 Residents who are all senior-level bankers and finance professionals with a minimum of ten years of experience.

– Private sector organisations and societies that are owned and managed by locals who have a strong track record of operating their businesses over the last five years.

– Existing Local Area Banks (LABs), Urban Co-operative Banks (UCBs), Non-Banking Finance Corporations (NBFCs), and Micro Finance Institutions (MFIs) that are governed by locals may also choose to be transformed into SFBs.

These promoters or promoter organisations must be qualified and have a solid track record. This is a reference to the promoters’ integrity and successful track records over the previous five years.

Capital Needs and Promoter Contribution for SFBs

It is anticipated that these entrepreneurs would establish the SFB with a minimum net worth of at least Rs. 100 crores. Within the following five years, the SFB’s net value must rise to Rs. 200 crores.

At least 40% of the promoter’s paid-up capital is required, and it can be reduced to 26% in 12 years.

The total amount of all FIIs, FPIs, and Qualified Foreign Investors (QFIs) holding foreign shares cannot exceed 24% of the total paid-up capital. The Board of Directors, however, has the authority to increase this by a Special Resolution to 49%.

A capital adequacy ratio of 15% of capital to risk-weighted assets is also demanded of banks (CRWA).

What types of tasks may the small finance banks take on?

The following services can be provided to clients by SFBs that are set up.

Accepting deposits and lending to underserved segments of society are basic banking activity.

distribution of insurance, pension, and mutual fund units after receiving RBI permission.

SFB may also get authorization as approved foreign exchange dealers.

However, within a year, these SFB outlets must open at least 25% of their banking locations in unbanked rural areas. Less than 10,000 people must reside in these centres.

List of Small Finance Banks in India

Small Finance Banks (SFBs) were established by the RBI in 2016 on the direction of the Government of India to increase the emphasis on financial inclusion and to guarantee that banking products are accessible to Indian residents who live in the last mile of the financial system.

10. North East Small Finance Bank

  • Headquarter: Assam 
  • Founded: 2016
  • Industry: Other Banks
  • Symbol: nesfb


The Small Finance Bank Operations Team helps the Branches in Account Opening, Account Servicing, CTS Clearing, MF Loan Disbursement, Treasury Back Office operating, and Retail Asset Loan Operations. North East Small Finance Bank is formerly known as nesfb (EDL, Home Renovation, Loan against Rent Receivable, Skill Development, etc).

Asset products offered by NESFB include loans for business development ranging from 5 to 25 lakhs, loans against term deposits, personal loans for salaried individuals, loans for pig farms, loans for skill development, cash credit facilities, and loans against rent.

9.Ujjivan Small Finance Bank

  • Headquarter: Bengaluru
  • Founded: 2017
  • Industry: Other Bank
  • symbol: USFB


USFB is the official name of Ujjivan Small Finance Bank. It is one among India’s top small financial institutions. The client experience is being improved by Ujjivan Small Finance Bank as it broadens its customer base.

UFSA is Customers now have more ability to seek out quick and simple access to credit thanks to strengthened digital interfaces across regions and languages.

USFB Micro Banking

By providing a comprehensive range of goods and services such group loans, individual loans, savings/deposit products, two-wheeler loans, insurance, payment solutions, remittances, and others, USFB strives to achieve “Sampoorna Family Banking.”

In addition to launching the PM SVANIDHI loan and the Gold loan this year, USFB also collaborated with Airtel Payment bank locations and PayNearby to accept payments through those channels as well as introduced alternative service channels including Money Mitra points for Proximity Banking services.

Rural Banking

The USFB also promotes the Kisan Pragati Card product, reaching out to small and marginal farmers through farmers clubs and providing a variety of goods to meet their needs.

Digital Project

In addition to partnering with Airtel Payments Bank, USFB has introduced a number of cashless EMI payment options, including API-based digital payback. Customers of USFB Micro Banking had enrolled on the UPI and mobile banking platforms. UPI QR is being adopted steadily and expanding month over month.

8. Suryoday Small Finance Bank

  • Headquarter: Mumbai
  • Founded: 2008
  • Industry: Other Bank
  • Symbol: Suryoday Bank


One of the top small finance banks (SFBs) in India is Suryoday Small Finance Bank, also known as Suryoday. A small finance bank in India, Suryoday began as a microfinance institution in 2009 and has since expanded.

In India, Suryoday is becoming known as a partner who prioritises the needs of the client and provides unbanked and underbanked groups with access to finance. According to our philosophy of customer-centricity, Suryoday has made an effort to build a solid and enduring relationship with consumers in their moment of need.

The asset products offered by Suryoday Bank are divided into inclusive finance loans, which include loans to joint liability groups (JLGs), loans for affordable housing, secured business loans (SBL), loans for microbusinesses (T-Nagar), and other loans.

7. Capital Small Finance Bank Limited

  • Headquarter: Jalandhar
  • Founded: 2000
  • Industry: Other Bank
  • Symbol: CapitalBank


After converting from Capital Local Area Bank, Capital Small Finance Bank became India’s first small finance bank. It began its journey as a local bank. just before becoming a Small Finance Bank. Since then, we have swiftly expanded across northern India.

The goal of Capital Small is to provide low-cost, top-quality banking to consumers in India’s rural areas as well as in towns and cities, as well as to people from all socioeconomic classes and both large and small businesses.

They provide institutional lending to small borrowers in the agricultural, MSME, and retail sectors while offering local communities with secure and dependable financial solutions.

Bank for Small Capital: Agriculture

The capital bank’s Kisan Credit Card Scheme, which offers farmers short- and long-term critical credit facilities, continues to be its hallmark product.

Capital MSME- The Capital Bank offers services such as financing of stocks and book loans, fixed asset financing, project finance, among others, to help clients’ businesses function smoothly and grow. It also meets their long-term financial needs.

Financial mortgage

  • The Capital Bank is still concentrating on small-ticket items and giving lower- and middle-income populations the much-needed help they need when it comes to getting credit.
  • The Bank offers a variety of third-party products to its clients, serving as a one-stop shop for all of their financial requirements, including insurance, foreign currency services, including money transfer and exchange needs.
  • The capital bank has partnerships with ICICI Prudential Life Insurance Co. and HDFC Life Insurance Co. in the area of life insurance.
  • Capital has partnered with Bajaj Allianz General Insurance Co. Ltd. and SBI General Insurance Co. Ltd. in the general insurance and health insurance sectors. In the forex authorised dealer sector, Capital has partnered with AD 1 Banks.
  • Money Transfer Capital has partnerships with Ria Money, Moneygram, and Western Union.

6. Jana Small Finance Bank

  • Headquarter: Bengaluru
  • Founded: 2000
  • Industry: Other Bank
  • Symbol: JSFB


One of the top and first small finance banks in India is Jana Small Finance Bank Limited, often known as JSFB. Among all Indian Small Finance Banks, they have the second-most geographically diverse portfolio with a presence across the whole country.

Saghamithra Urban Programme (SUP), a for-profit NBFC-MFI that offers financial inclusion services to underserved customers in India, was the original name of the project. It was housed in the exemplary microfinance institution Sanghamitra Rural Financial Services (SRFS), which was founded by one of the most reputable rural NGOs in India. The path to service consumers has finally been begun by Jana Small Finance Bank.

5. ESAF Small Finance Bank 

  • Headquarter: Kerala
  • Founded: 1995
  • Industry: other bank
  • Symbol: ESAF

ESAF Small Finance Bank Profile:

After launching Micro Enterprises Development (MED) services in 1995, ESAF began its journey as an NGO and eventually transformed into ESAF Microfinance and Investments Pvt. Ltd.

To do this, the Bank employs a triple bottom line strategy with a social business model, with a focus on people, the planet, and prosperity. ESAF is presently scheduled for commercial banks in India.

The Bank has implemented a number of policies, including an Environmental, Social, and Governance (“ESG”) policy, to carry out its triple bottom line strategy.

  • According to the ESG policy, it is committed to promoting financial inclusion and gender equality through specialised financial services, protecting the environment and ensuring sustainable development, and establishing a governance framework to ensure accountability, transparency, and compliance with internal and external ESG standards.

ESAF Micro Loan

By upselling and cross-selling to the microloan customer base as well as marketing our microloans to family members of microloan customers, the Bank is able to raise the number of microloans while also strengthening its ties with these clients and establishing itself as their trusted bank of choice.

ESAF Retail Loan

The retail lending portfolio consists of school loans, lease rental discounting, gold loans, vehicle loans, personal loans, clean energy loans, and loans against property.


The Bank’s portfolio of corporate and MSME loans has been expanding. MSMEs, NBFCs, MFIs, and current microloan borrowers who seek to expand their businesses are the target clients for the MSME and Corporate loans.

With the exception of corporate loans, the ESAF Bank finds its clients for MSME and corporate loans through branches, internet platforms, direct sourcing, and third-party intermediaries, such as business correspondence.

ESAF Agricultural loans

The products offered by the Bank are focused on meeting the financing needs of farmers involved in agriculture and related activities and include term loans, dairy development loans, farmer producer organisation (FPO) finance, KCC, and agri gold loans. The Bank targets individual farmers and joint borrowers engaged in agriculture and related activities.

ESAF Performance in FY21

The Hrudaya deposit plan is a special deposit programme offered by ESAF Small Finance Bank. As the name implies, it supports a social purpose by giving consumers a chance to contribute to the economic growth of the bottom of the pyramid. It works as an organisation to close the wealth gap in order to promote financial stability.

4. Utkarsh Small Finance Bank

  • Headquarter: Varanasi 
  • Founded: 2017
  • Industry: Other Bank
  • Symbol: USFBL

Utkarsh Small Finance Bank Profile:

The official name of Utkarsh Small Finance Bank is USFBL. One of the top small financing banks in India is this one. They have expanded their reach throughout India and their offerings to the underserved and unserved segments of the market.

Customers are served by USFBL through a product offering that includes both deposits and liabilities. Savings accounts, salary accounts, current accounts, recurring and fixed deposits, and locker facilities are among the deposit products.

USFBL Loans include 

  • Microbanking Group Loans in its portfolio.
  • Microbanking Personal Loans
  • Consumer loans
  • Personal Loans
  • Commercial Loans
  • Loans for commercial vehicles and construction machinery
  • loans secured by real estate overdraft loans Loans from wholesale banking
  • Mortgage Loans

3. Fincare Small Finance Bank

  • Headquarter: Bengaluru
  • Founded: 2017
  • Industry: Other Bank
  • Symbol: fincare

Fincare Small Finance Bank Profile:

Future Financial Service Private LTD and Disha Microfin Private Ltd, two NBFCs in the microfinance sector, were combined to become Fincare Small Finance Bank.

The RBI granted Disha Microfin Private Ltd a final licence to manage client banking activities. A scheduled commercial bank in India is called Fincare Small Finance Bank.

The digital path was followed by Fincare Small Finance Bank as a business mandate in saving accounts, current accounts, deposits, gold loans, property loans, 2-wheeler loans, and other areas.

Fincare Performance in FY21

  • Introduced a Video KYC (VKYC) option for account opening, allowing customers to open Full KYC accounts entirely online.
  • Updated WhatsApp Banking: switched to a Natural Language Processing-based interface from a Menu-driven one Conversational and multilingual BOT
  • Gold loan processing, disbursement, collections, renewals, and closures can now all be done on a tab thanks to the introduction of tab-based gold loan applications.
  • Introduced Customers may use a debit card easily and contactlessly using virtual debit cards.

2. Equitas Small Finance Bank

  • Headquarter: Chennai
  • Founded: 2016
  • Industry: Other Bank
  • Symbol: EQUITASBNK

Equitas Small Finance Bank Profile:

One of the top Small Finance Banks (SFB) in India is Equitas Bank. Customers can choose from a variety of financial services and products offered by them. In India, they have concentrated on providing services to economically disadvantaged and unserved client categories.

Products from Equitas are appropriate for a variety of consumers with various characteristics. These include offering small company loans that include- loan against property Housing loans, loans for agriculture to microentrepreneurs, loans for joint liability companies primarily made up of women, loans for used and new commercial vehicles for drivers and microentrepreneurs, MSE loans for proprietorships, and loans to non-banking financial institutions are all examples of loans that are available (NBFCs).

Equitas Bank Product-wise performance

  • Small Business Loans (incl. Housing Finance): 7,971.14 crores
  • Vehicle Finance: 4,530.11 crores
  • Micro Finance: 3,235.73 crores
  • MSE Finance: 1,179.67 crores
  • NBFC Finance 782.66 Others: 225.25 crores

Equitas bank: Microfinance

Customers of microfinance typically include farmers, dairy farmers, and other small business owners that sell produce, fruits, flowers, and other items. To help their female clients launch their small enterprises or other income-generating ventures, they provide group loans to them.

The loans are available for a two-year term with annual interest rates ranging from 23% to 24%. These loans are unsecure and without collateral, but they are effectively secured using a peer-guarantee mechanism to encourage credit discipline through group support, responsible financial behaviour, and early loan payback. In this part, the loan payout procedure is entirely paperless.

Equitas Bank: Mortgage Lending

They offer loans for the purchase of a plot of land or a house, the construction of a house, and home improvement/restoration/extension. Their primary target market is self-employed people who have little access to loans from banks and larger housing financing firms.

Bank Equitas: Auto Financing

providing car loans to primarily inexperienced buyers of old commercial cars through the “formal financial channel,” who have knowledge of logistics, and to small fleet operators Customers who take out in-vehicle loans generally have little or no credit history and little access to bank loans.

Micro & Small Enterprise (MSE) Financing from Equitas Bank

MSE Finance wants to make it easier for businesses to grow and modernize, which includes acquiring fixed assets and addressing working capital requirements.

With a focus on urban and semi-urban areas, Equitas Bank engages with businesses that keep official records for credit evaluation.

Working capital loans are available in the following forms: • Fund-based facilities, such as overdraft and cash credit limitations

  • Non-fund-based facilities, such as letters of credit and bank guarantees

Additionally, MSE provides Term Loans for particular reasons to companies with yearly revenues between 10 and 15 crores.

1. AU Small Finance Bank Ltd

  • Headquarter: Jaipur
  • Founded: 1996
  • Industry: other bank
  • Symbol; AUBANK

AU Small Finance Bank Profile:

Beginning with a Non-Deposit Taking Non-Banking Finance Company, AU Small Finance Bank (NBFC). They have carried out their operation for both served and unserved members of the lower middle class.

The AU Small Finance Bank has 20 years of expertise and a sizable clientele in the areas of housing loans, business loans, and auto loans.

Following 2016 and the RBI’s guidelines It is important to highlight that even though Au Bank has a licence, 7 out of 10 SFBs still have a very high percentage of MFI loans, whereas AU is the only top 3 SFB with no direct exposure to MFI loans.

A tiny financial institution: Vehicle Loan

The accessibility and dependability of client data have increased in the context of automobile loans, particularly those for new and used cars.

The “Vaahan” app’s development This software allows users to look up online car information. To obtain all vehicle data, from the car’s age to the number of hands it has changed, this has to be reinforced further.

Little: MSME

As one of the leading lenders to micro MSMEs in North, Central, and Western India over the past ten years, AU Bank is committed to bringing more Micro companies into the structured credit system.

AU Small Housing Loan

Based on its client base and demands, such as those for house purchases, top-up home loans, home building, loan against property, and other needs, AU started to participate in the affordable housing market.


Some of the smaller financing institutions have been crucial in promoting financial inclusion throughout the years. More than 2000 branches have been opened nationwide by the top 5 SFBs mentioned above.

This concludes this article about small finance banks. In the comments section below, let us know what topic you would want us to address next. Cheers to reading!



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