Top 10 Small Finance Banks (SFBs) in India 2024

Jul 18th 2024
Small Finance Banks (SFBs) in India

Small Finance Banks aim to empower marginalized groups in society, including small businesses, marginal farmers, micro and small enterprises, as well as unorganized sectors, by providing them with access to financial services. The primary objective of these banks is to serve the financial needs of underserved communities efficiently. Nonetheless, they are required to comply with the laws and regulations established by the Reserve Bank of India and the Indian government. 

Similar to other commercial banks, these institutions offer banking services such as lending and accepting deposits. There are currently 12 Small Finance Banks operating across the country. Explore the list of Small Finance Banks in India 2024 outlined here.

Timeline of Small Finance Banks in India

Small Finance Banks, abbreviated as SFBs, are a unique type of banks in India. With an SFB license, a bank can carry out fundamental banking activities such as accepting deposits from individuals and providing loans. Below is a concise overview of the history of Small Finance Banks in India.

Year Event
July, 2014 RBI released initial guidelines for SFBs and requested public feedback
November, 2014 RBI issues final guidelines for SFBs
January, 2015 Deadline for interested organizations to apply
February, 2015 RBI releases a list of groups that applied for SFB licenses
September, 2015 10 groups receive temporary licenses from the RBI
April, 2016 Capital Small Finance Bank opens branches and becomes the first SFB


What are the Objectives of Small Finance Banks (SBFs)?

The objectives of establishing Small Finance Banks in India are as follows:

  • Providing Basic Banking: Offering essential banking services like accepting deposits, lending money, and handling financial transactions.
  • Expanding Financial Access: Targeting underserved communities, including rural and semi-urban areas, to ensure everyone has access to banking services.
  • Supporting Small Businesses: Offering credit and financial services to small farmers, micro-industries, small businesses, and other informal sector players.
  • Fulfilling Priority Lending: Allocating a significant portion of loans to priority sectors outlined by the Reserve Bank of India (RBI).
  • Reaching Unbanked Areas: Establishing branches in regions without banking services to improve financial inclusion.
  • Embracing Technology: Using advanced technology and cost-effective methods for efficient and convenient banking.
  • Distributing Mutual Funds: With RBI approval, providing mutual fund units to customers.
  • Offering Pension and Insurance: Subject to RBI authorization, offering pension and insurance products.
  • Engaging in Retail Banking: Providing various retail banking services like savings accounts, fixed deposits, remittances, and payment services.
  • Serving Non-Resident Indians: Offering banking services to Non-Resident Indians in compliance with RBI regulations.
  • Assisting Small Enterprises: Providing banking services to small and medium-sized businesses and other corporate clients.
  • Supporting Housing Finance: Providing loans for housing and real estate purposes.
  • Promoting Digital Banking: Offering mobile and digital banking services for enhanced customer convenience.
  • Educating Customers: Conducting programs to educate customers about banking and financial matters.
  • Empowering Self-Help Groups: Collaborating with self-help groups to provide micro-credit and other financial services.
  • Contributing to Communities: Participating in community development initiatives to support local economies.

How are Small Finance Banks Different from Payment Banks and Regular Banks?

There are a few differences between how the Small Finance Banks of India work compared to the payment banks and regular banks. The differences are listed below in the table:

Particular Small Finance Banks Payment Banks Regular/Commercial Banks
Deposit Amount No minimum or maximum deposit limit Maximum deposit of 1 lakh rupees No limit on the deposit amount
Loans and Credit Cards Can issue debit cards, credit cards and loans Can issue debit cards. Credit cards and loans can be issued if a payment bank has a tie-up with a regular bank Can issue debit cards, credit cards and loans
Minimum Capital Requirement Requires 200-crore paid-up capital with promoters contributing 40% initially (can be reduced to 26% after 12 years) Requires 100-crore paid-up capital with promoters contributing 40% of the capital Must have a paid-up voting equity capital of Rs 500 crore.
Onboarding Process Less time consuming Less time consuming More time consuming
Minimum Balance Requirement No minimum balance required No minimum balance required Must follow a minimum-balance protocol to avoid penalty
Interest Rate Offer higher interest rate Offer higher interest rate Offer lower interest rate


Also ReadTop 5 Payment Banks in India 2024


List of All Small Finance Banks That are Operational in India in 2024

In total, 12 small finance banks are currently operational in India. Let us find out about each of these banks in brief in this section. 

1. Centrum Financial Services Limited and BharatPe (Unity Small Finance Bank)

Unity Small Finance Bank Limited was publicly incorporated on August 25, 2021. This non-governmental entity is duly registered with the Registrar of Companies in Delhi. It boasts an authorised share capital of ₹40,000,000,000 and its paid-up capital stands at ₹7,049,019,600. The bank is predominantly engaged in various financial intermediation activities. 

Its headquarters is situated at 40, Basant Lok, Vasant Vihar, New Delhi, DL 110057, India.

2. Shivalik Mercantile Co-operative Bank Ltd (Shivalik Small Finance Bank)

Shivalik transformed from Shivalik Mercantile Co-operative Bank into India's first Small Finance Bank. Founded in 1998 by Mr Yashvir Kumar Gupta, with Mr Suveer Kumar Gupta as its initial MD & CEO, the bank transitioned into SSFB under Mr Suveer Kumar Gupta’s leadership, who now serves as an Advisor to the Board.

Shivalik Bank, with 25+ years of experience in retail banking, focuses on technology and consumer-centricity, leveraging Infosys Finacle for core and digital banking solutions. Its cloud architecture enables scalable, cost-effective growth and full availability on retail payment platforms as a member of the National Financial Switch. 

3. Janalakshmi Financial Services Pvt Ltd (Jana Small Finance Bank)

Janalakshmi Financial Services Private Limited is an Indian private company. It's registered as a 'company limited by shares'. The company's authorized capital is Rs 12,700.0 lakhs, with 98.689285% of the capital paid up, totalling Rs 12,533.54 lakhs. Primarily focused on finance, Janalakshmi Financial Services Private Limited is currently active in its operations. The company is registered with the Bangalore (Karnataka) Registrar Office.

4. RGVN North East Microfinance Ltd (North East Small Finance Bank)

RGVN North East Microfinance Ltd was officially founded on 17th October 2017, with a mission to make a significant impact on the North Eastern region, aiming to reach 5 lakh clients by 2017. This initiative was designed to improve access to health, education, and livelihood opportunities. 

Based in Guwahati, RGVN(NE)MFL, as of 30th September 2017, boasted a vast network comprising 141 branches across 7 Northeastern states, including Assam, Arunachal Pradesh, Meghalaya, Nagaland, Tripura, West Bengal, and Sikkim. This network served approximately 4.49 lakh borrowers, managing a loan portfolio of Rs.693.31 crore, with an impressive one-time repayment rate of 97.86%.

5. Disha Microfin Pvt Ltd (Fincare Small Finance Bank)

Fincare Small Finance Bank initiated its banking operations on 21 July 2017, following the acquisition of its final license from the Reserve Bank of India (RBI) under Section 22 of the Banking Regulation Act, 1949. Dedicated to enabling financial inclusion, Fincare Small Finance Bank caters to the underbanked at the base of the economic pyramid, as well as the mass retail and micro & small enterprise segments. With over 500 banking outlets and a team of more than 5,000 employees, the bank meets the diverse banking needs of customers across 13 states.

Fincare Business Services Limited, the holding entity of the Fincare Small Finance Bank, enjoys the support of prestigious investors such as TA Associates, True North, Leapfrog Investments, Tata Opportunities Fund, SIDBI, Edelweiss Tokio Life and Kotak Mahindra Life among others.

Since its inception in 2007. Fincare has been dedicated to providing microfinance loans aimed at income generation for women’s groups. Boasting over 1.4 million customers, Fincare’s gross loan portfolio amounted to 2,836 crore rupees as of 31st December 2018. Fincare Small Finance Bank offers a comprehensive range of innovative banking products, including savings accounts, current accounts, fixed deposits, NRI fixed deposits, recurring deposits, microloans, cash overdrafts, loans against property, gold loans, institutional finance and 2-wheeler loans.

6. AU Financiers India Ltd (AU Small Finance Bank)

After acquiring the Small Finance Bank (SFB) license in 2015, AU Financiers marked the beginning of its journey as an SFB on 19th April 2017. Within the same year, it achieved the Scheduled Bank status on 1st November and became a Fortune India 500 Company. Transitioning from a Non-Banking Financial Company (NBFC) to a bank, it has consistently focused on developing solutions tailored to the evolving needs of its customers. As custodians of depositor’s wealth, the Bank has maintained the highest level of compliance, establishing itself as a well-governed and trusted financial institution. It is guided by the principles of inclusivity, progress for all, simplicity and a sense of action and urgency. 

Reflecting on its 7-year journey as a scheduled commercial bank, the Bank has experienced a path marked by growth, impact and innovation. By harnessing technology, championing financial inclusion and nurturing robust customer relationships, the Bank has not only transformed lives but also significantly contributed to the nation’s economic development. Its footprint has impressively expanded from 403 touchpoints across 8 states and 2 union territories in 2017 to 1,042 touchpoints in 21 states and 3 union territories as of 30th September 2023.

7. ESAF Microfinance (ESAF Small Finance Bank)

After assessing the significant contributions of ESAF in the development of rural and unreached segments of the nation, the Reserve Bank of India graciously issued an in-principle license to ESAF Microfinance and Investments Pvt. Ltd. in October 2015, allowing it to establish a new Small Finance Bank. Upon fulfilling the licensing conditions set forth by the Reserve Bank of India and under the RBI’s final license in November 2016, ESAF Small Finance Bank commenced operations on 10th March 2017.

ESAF Small Finance Bank is dedicated to combating the “Partiality of Prosperity” by empowering those at the bottom of the socioeconomic pyramid. With a customer base of 56 lakh, the bank’s business model emerges as a distinctive approach to selecting and serving customers on the front end with the technology, processes and disciplines of contemporary retail banking on the back end. Over the past few years, ESAF Small Finance Bank has experienced a remarkable phase of growth and consolidation. 

8. Utkarsh Microfinance Private Ltd (Utkarsh Small Finance Bank)

Utkarsh Small Finance Bank Limited was established on April 30 2016 in Varanasi, Uttar Pradesh as a Public Limited company. It received its Certificate of Incorporation from the Registrar of Companies. The founding entity, Utkarsh CoreInvest Limited, commenced its operations as a non-banking financial company or NBFC in 2010 with a focus on delivering microfinance solutions to the underserved populations of Bihar and Uttar Pradesh. Subsequently, it transitioned into an NBFC-MFI. The Bank offers a range of banking and financial services and is regulated by the Banking Regulation Act of 1949.  

On 7th October 2015, the promoter was granted the RBI’s in-principal approval to establish a Small Finance Bank (SFB), which led to the incorporation of Utkarsh Small Finance Bank Limited as a wholly-owned subsidiary on 30th April 2016. Following this, the Bank received the RBI’s final approval to operate as an SFB on 25th November 2016. As a result, Utkarsh CoInvest Limited transferred its microfinance business to the bank as a going concern, enabling the bank to commence operations on 3rd January 2017. Furthermore, the Bank was designated as a Scheduled Commercial Bank under the second schedule of the RBI Act, following a notification issued by the RBI on 4th October 2017 and published in the Gazette of India on 7th November 2017. 

Utkarsh Small Finance Bank’s banking operations span across India, covering 22 states and union territories through 686 banking outlets as of 31st March 2022. The network comprised 209 on-site and 6 off-site ATMs. Furthermore, as of the same date, the bank had established 310 micro-ATMs. Notably, as of 31 March 2021, 67.9% of the Gross Loan Portfolio (GLP) was generated from Uttar Pradesh, Bihar and Jharkhand respectively. 

9. Suryoday Microfinance Private Ltd (Suryoday Small Finance Bank)

In 2009, Suryoday Small Finance Bank began its ascent with a humble footprint, opening merely 10 branches throughout Maharashtra and Andhra Pradesh. At that time, they served a modest group of 1500 active clients and their gross loan portfolio totalled a mere 11 crore rupees. By 2013, the scenario had dramatically changed. Through meticulous effort and thoughtful expansion strategies, Suryoday has flourished, proudly operating an expansive network of 46 branches while catering to a substantial customer base of 1,52,000 individuals.

The zenith of their accomplishments was reached in August 2016 when the Reserve Bank of India awarded them the much-coveted in-principal license to function as a small finance bank. This milestone represented a significant turning point, emphasizing their dedication to financial inclusion and empowerment. The following year 2017 saw the realization of their dreams as they officially began operations as Suryoday Small Finance Bank after receiving the final license from the RBI.

10. Equitas Holdings Private Ltd (Equitas Small Finance Bank)

Equitas Small Finance Bank, formerly known as Equitas Microfinance Ltd, was established as a small finance bank in 2016. It initially operated as a microfinance lender. The bank’s headquarters is located in Chennai. It operates as a subsidiary under its parent company - Equitas Holdings Ltd. 

Upon obtaining a license from the Reserve Bank of India on 30 June 2016, Equitas Small Finance Bank commenced operations on 5 September 2016. Effective 4 February 2017, Equitas achieved the status of a scheduled bank. 

The bank aimed to construct a network encompassing 412 branches across 11 Indian states by the end of the fiscal year 2016-17. However, by July 2017, the bank had successfully transitioned to technology-oriented services, with 83% of transactions being conducted online. Among these technological advancements was the provision of RFID stickers, which enabled automatic payment of road tolls, with seamless digital settlements. 

On 23 November 2021, the bank proudly announced a strategic partnership with HDFC Bank for the launch of a co-branded credit card. Furthermore, in 2021, the boards of Equitas Holding company unanimously approved a reverse merger between the two entities. This strategic merger was completed in March 2023. 

11. Capital Local Area Bank Limited (Capital Small Finance Bank)

Capital Small Finance Bank Ltd was established in 1999. As suggested by its name, it operates as a specialized small finance bank and earned the distinction of being the first microfinance institution, not previously a non-banking financial company (NBFC), to be granted an SFB license. Capital Small Finance Bank Ltd boasts a robust presence in semi-urban and rural regions, primarily utilizing a branch-based operating model. The bank primarily caters to the middle and upper-income segments, targeting individuals with annual incomes ranging from 4 lakh rupees to 50 lakh rupees. 

Capital Small Finance Bank Ltd adopts a financial supermarket approach, aiming to provide its customers with a diverse mix of product offerings and outstanding customer service accessible through both its physical branches and digital platforms. Headquartered in Jalandhar, Punjab, the bank has successfully expanded its branch and operational network throughout the northern regions of the country - Punjab, Haryana, Rajasthan, Delhi, Chandigarh and Himachal Pradesh. It boasts a robust presence with 172 branches and 174 ATMs efficiently serving its clientele. 

12. Ujjivan Financial Services Private Ltd (Ujjivan Small Finance Bank)

Ujjivan Small Finance Bank Limited (USFB-L) stands as one of the premier small finance banks in the nation. Dedicated to a mass-market approach, it prioritizes serving the unserved and underserved segments, promoting financial and digital inclusion. As a comprehensive hub for financial services, USFB provides a personalized customer experience to its expansive clientele. Leveraging technology as a fundamental enabler, Ujjivan Small Finance Bank persistently broadens its reach and elevates the customer experience. 

Ujjivan Financial Services Limited (UFSL) began its operations as a Non-Banking Financial Company (NBFC) in 2005, driven by the mission to deliver a comprehensive suite of financial services to the “economically active poor”, a demographic underserved by the existing financial institutions. Upon receiving a license from the Reserve Bank of India (RBI), UFSL established Ujjivan Small Finance Bank, which commenced its banking operations on 1st February 2017. 

Also ReadTop 10 Non-Banking Financial Companies (NBFCs) in India 2024


Frequently Asked Questions (FAQs)


Q: What is a Small Finance Bank (SFB)?

A: Small Finance Banks are financial institutions that provide financial services to the unserved and unbanked regions of the country. They are registered as public limited companies under the Companies Act of 2013. 

Q: How many small finance banks are operating in India?

A: In total 12 small finance banks are operating in India currently. 

Q: Are small finance banks covered under DICGC?

A: Yes, small finance banks registered with DICGC are insured. DICGC safeguards up to a maximum of 5 lakh rupees for each account holder in small finance banks. 

Q: Can a small finance bank issue credit cards?

A: No, small finance banks cannot issue credit cards but can issue debit cards. They also cannot issue large loans. 

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Author: Abhik Das

Abhik Das is a versatile content writer with over 5 years of experience crafting engaging and informative content across diverse industries. His expertise spans the fields of ed-tech, pharmaceuticals, organic food, travel, sports, and finance.

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