Top 12 Small Finance Banks In India

Small finance banks have become very popular over the period. They cater to the requirements of people who don’t have bank accounts or those who require more money in their accounts.  Even though these small finance banks in India serve the financial needs of underserved communities, they have to comply with the laws and regulations of the RBI and the Indian government. Like other banks, small finance banks offer services such as lending and receiving deposits. Right now, there are 11 small finance banks in India. Let us read about the SFB’s in detail. 

List of Best Small Finance Banks in India 2024

 

1. AU Small Finance Bank

Key details: 

• AU Financiers commenced its journey as a small finance bank on 19th April 2017. 

• Within the same year, it became a Scheduled Bank on 1st November and achieved the status of a Fortune India 500 Company. 

• The Bank has maintained the highest level of compliance with its customers and has gained their trust. It is governed by the principles of inclusivity, progress for all, simplicity and a sense of action and urgency. 

• Its footprint has expanded widely 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.

Some products and services:

• Savings account: You can open a full KYC Savings account over a video call with AU Small Finance Bank in just 5 simple steps from the comfort of your home. Earn up to 7.25% p.a. on your savings.

• Deposits: AU Small Finance Bank provides a diverse range of deposits like fixed deposits, Covid Shield deposits, recurring deposits, overdraft against fixed deposits, and Planet First AU Green fixed deposits. These deposits come with attractive annual interest rates and ensure an attractive return on investment.

• Retail loans: The bank provides various types of retail loans like personal loans, home loans, vehicle loans, gold loans, etc.

• Card offers: The bank offers various types of debit cards, credit cards, and Commercial credit cards. The bank offers the Silver Spoon dining program that gives 15% off at 300 plus restaurants on AU Bank credit and debit cards. You can earn rewards on shopping, paying bills, fund transfers, or ordering your favourite food using your AU Debit Card, AU 0101 App, etc.

• AUClick2Gift: You will get 12.5% off on shopping with popular brands like Nykaa, Make My Trip, Aurelia, etc.

2. Capital Small Finance Bank

Key details: 

• Initially known as Capital Local Area Bank Limited, Capital Small Finance Bank Limited was set up in 1999. 

• It operates as a specialized small finance bank and has the unique status of being the first microfinance institution to be given an SFB license. It was not an NBFC previously. 

• It has a wide footprint in semi-urban and rural regions. It works based on a branch type operating model. 

• The bank primarily caters to the middle and upper-income segments, targeting individuals with annual incomes in the range of 4 lakh rupees to 50 lakh rupees.

• Capital Small Finance Bank Ltd aims to provide its customers with a varied mix of products and outstanding customer service, which can be accessed at all its physical branches and digital platforms. 

• The bank has its headquarters in Jalandhar, Punjab. It has expanded its network of branches and operations throughout the northern regions of the country. It has a strong presence with 172 branches and 174 ATMs and efficiently serves its people. 

Some products and services:

• Savings account: The bank offers various types of savings accounts - Normal savings accounts, capital savings accounts, capital saver savings accounts, capital super saver savings accounts, and basic savings bank account (Suvidha Bachat). 

• Current account: The bank provides various types of current accounts - Normal current account, capital current account, capital plus current account, capital premium current account, and flexi current account. 

• Term deposits: Various types of term deposits offered by the bank are cumulative deposits, short-term deposits, quarterly interest deposit schemes, monthly interest deposit schemes, and recurring deposits. 

• Social security schemes: The bank offers various social security schemes like Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY). 

3. Equitas Small Finance Bank 

Key details:

• Equitas Small Finance Bank, earlier known as Equitas Microfinance Ltd, was set up as a small finance bank in 2016. It started and operated as a microfinance lender. The bank has its headquarters in Chennai. It works as a subsidiary under its parent company - Equitas Holdings Ltd. 

• This modern small finance bank offers children, youngsters, families, and business people new ways to bank. This small finance bank aims to elevate the banking experience of users and change the way banking is being done. 

• The bank offers an interest rate of 7%. For amounts between Rs. 5 lakhs but upto INR 50 crores, the interest rate is 7.50% per annum. 

• The bank also gives flexible choices for savings accounts. FD interest rates go up to 9% yearly.

Some Key Products and services:

• Savings Account: There are two variants of the savings account - My Savings and Easy Savings account. For both accounts, the interest rate is computed on the daily closing balance and will be paid on a quarterly basis by directly crediting to the savings account. On the My Savings account, the bank offers an interest rate in the range of 5.00% to 7.80% for closing balances more than Rs. 1 lakh to Rs. 25 crores and above. The interest rate is 3.50% for closing balances upto Rs. 1 lakh. On the Easy Savings account, interest rates lie between 5.25% to 7.00% for closing balances between 1 lakh to Rs. 5 lakhs and above. The interest rate is 3.50% for closing balances upto Rs.1 lakh. 

• Business account: A business account comes with features to support your business growth. A multi-city chequebook containing 25 leaves per month and a RuPay debit card are given. An average quarterly balance of Rs. 10,000 should be maintained. Based on the transactions carried out with your business account, your AQB will be waived. 

• Loans: Equitas Small Finance Bank offers various types of loans - Gold loans, home loans, loans against property, commercial vehicle loans, and small ticket loans to households that have annual incomes up to Rs. 300000. 

4. ESAF Small Finance Bank

Key details:

• After assessing the contributions and importance of ESAF in the development of rural and unreached segments of the nation, the Reserve Bank of India has issued an in-principle license to ESAF Microfinance and Investments Private Limited to establish a new Small Finance Bank during October, 2015.

• After getting the license from RBI, ESAF Small Finance Bank commenced its business on 10th March 2017.

• The Bank offers a collection of modern banking services like ATMs, Debit Cards, Safe Deposit Lockers, Mobile Banking, Internet Banking, Agent Banking, SMS Banking, RTGS, NEFT, CTS, etc.

• The doorstep delivery services, free video calling facility at branches and Hrudaya Fixed Deposit Schemes are some of the features offered by ESAF Small Finance Bank. 

Some products and services:

• Savings account: ESAF offers some of the finest savings accounts for all categories of customers.  There are various customized options for women, senior citizens, elite customers, etc. 

• Deposits: The bank offers fixed deposits and recurring deposit schemes like any other small finance bank. Apart from this, it offers a unique deposit called Hrudaya Deposit. The Hrudaya deposit is for a social cause. Via this scheme, ESAF Small Finance Bank has come up with an innovative solution to give affordable financial services to members of ESAF Bank. 

• Loans: The bank provides various kinds of loans like KISAN Saral and KISAN Pragati (Working Capital/ Term Loan for farming), ESAF KISAN JYOTI (Overdraft/Term loan to meet post-harvest expenses, maintenance of farm assets, etc.), ESAF FPO Finance (Loan to Organization/ entity/ company, etc.), Trade Receivables e-Discounting System (TReDs is an electronic platform for facilitating the financing/discounting of trade receivables of Micro, Small, and Medium Enterprises through multiple financiers, ESAF Farmer Interest Group Loan, personal loan, three-wheeler loan, two-wheeler, loans, and so on. 

5. Fincare Small Finance Bank 

Fincare Small Finance Bank Limited has merged with and into AU Small Finance Bank Limited effective 1st April 2024.

6. Jana Small Finance Bank 

Key Details:

• Jana Small Finance Bank is the fourth largest Small Finance Bank based on assets under management and the size of deposits as of March 31, 2023. 
• As of September 30, 2023, The bank has 771 banking outlets all over the country including 278 banking outlets in rural areas that do not have any banks, in 22 states and two Union territories. 

Some Products and services:

• Savings account: The bank offers a wide range of savings accounts to meet your banking preferences and needs. The interest offered is 6%. 
• Fixed deposits: The bank offers various fixed and recurring deposit schemes. It offers flexible interest payout options and penalty-free preclosure of deposits. Interest rates are attractive ranging between 7% to 8.25% with higher interest rates for senior citizens.
• Current account: The bank offers an array of current accounts. The current account comes with customer-centric features such as cash management services, which enable you to manage your working capital efficiently and doorstep banking, which facilitates you to bank from your workplace. 
• Group loans are designed to bring financial access to the conventionally unserved sections of society. Group loans are given with competitive interest rates and help enhance the economic status of customers apart from fulfilling their dreams. 
• Jana Pay Point: You can bank in your own neighbourhood with Jana Pay. This product enables access to banking and payment services through a network of agents. 

7. North East Microfinance Limited

Key Details:

• This company plays an important role in extending the sphere of finance to the poor, especially the women of the North Eastern Region and North Bengal.

• RGVN (North East) Microfinance Limited, is approved by the RBI as an NBFC-Core investment company w.e.f 29th May 2019, following the formation of North East Small Finance Bank in October 2017 (North East Small Finance Bank is a 100% subsidiary of RGVN). 

• It currently serves over 7 lakh customers through its sister concern North East Small Finance Bank.

• Various prestigious domestic and international reputed investors such as Small Industries Development Bank of India [SIDBI], SIDBI Trustee Company Limited A/c Samriddhi Fund, North Eastern Development Finance Corporation Ltd (NEDFI), Dia Vikas Capital Pvt. Ltd., Nordic Microfinance Initiative Fund III-Norway [NMI], Oiko Credit Ecunemial Development Cooperative Society-Netherlands, Pi Ventures, Bajaj Allianz, Rangsons LLP, Matterhorn Projects LLP and Brahmaputra Community Development Trust have invested in RGVN(NE) MFL with a developmental focus.

Some Key Products and services:

• Savings Account: The Bank offers 7 variants of the savings account - BSBDA small, BSBDA, Regular savings account, premium savings account, TASC savings account, institutional savings account, and salary account. The interest rates range from 4% to 6% for savings deposits ranging from 4.99 lakhs to 25 crores and above. 

• Current account: The bank offers 2 variants of current accounts - Current account (General) and Current Account Plus. The general account has a minimum quarterly balance of Rs. 2500 for the rural population and Rs. 5000 for the urban and semi-urban sectors. The Current Account Plus has a minimum quarterly balance of Rs. 5000 for the rural population and Rs. 10,000 for the urban and semi-urban sectors. 

• Xonchoi: This product is designed mainly to cater to the needs of self-help groups. It is used mostly by low income groups and micro level customers. A group of individuals will come together and deposit at regular intervals into a common fund. Members of the group can then take loans from the fund for various purposes like setting up small businesses, children’s marriage, education, etc. 

• Deposits: The bank offers 4 variants of deposits - Fixed deposits, recurring deposits, daily deposits, and other deposits. The fixed deposit rates range from 3.00-8.50% p.a. for the general public and 3.75-9.25% p.a. for senior citizens on tenures ranging from 7 days to 3650 days. The recurring deposit rates range from 4.00% p.a. to 7.50% p.a. for regular citizens and 4.75% p.a. to 8.00 p.a. for senior citizens on tenures ranging from 3 months to 10 years. The daily deposit rates range from  3.00 p.a. to 3.50 p.a. for general citizens and 3.50% p.a. to 4.00% p.a. for senior citizens on tenures ranging from 1 year to 3 years.   

• Cards: The RuPay debit cards provided by the bank are accepted at all ATMs in India. They are accepted by more than 1 million point of sale (POS) terminals & e-commerce sites. Based on the account variant, a flexible transaction limit will be fixed on the ATM and POS. The card is highly safe since it comes with a secure chip and offers PIN-based protection. 

8. Shivalik Small Finance Bank 

Key Details:

• Shivalik transitioned from being an Urban Co-operative bank namely Shivalik Mercantile Co-operative Bank (SMCB) into the first Small Finance Bank in India 

• The bank has been offering retail banking products and services for over 25 years. Products and services offered by the bank include loans, deposits, accounts, payments, debit cards, investment plans, insurance, digital banking, Demat and trading 

• It is highly technology-focused and consumer-centric. 

• The Bank is powered by Infosys Finacle Core Banking and Digital Banking Suite for both Internet and mobile banking. 

• Its architecture is cloud-based and this helps the bank to manage scale and power growth. 

• This bank is available on all retail payment platforms and is a direct member of the National Financial Switch.

Some products and services

• Savings account: The bank offers 4 variants for the savings account namely Silver Plus, Gold, Diamond, and Prime. All variants offer complimentary lounge access and accidental insurance cover of Rs. 2 lakhs. The Silver Plus and Gold accounts offer 5 and 10 free transactions per month (Including balance inquiry) at other banks’ ATMs respectively. The Diamond and Prime accounts offer 15 and unlimited free transactions respectively. 

• Loans: Shivalik Small Finance Bank offers various types of loans like business loans, retail trade loans, loans against property, gold loans, micro-loans, car or auto loans, commercial vehicle loans, rooftop solar loans, etc. 

• Deposits: The bank offers regular fixed deposits, recurring deposits, non-callable fixed deposits, and tax-saver fixed deposits (Both offering higher interest rates for senior citizens). 

9. Suryoday Small Finance Bank Limited

Key details:

• What started as Suryoday Microfinance Private Ltd transformed into Suryoday Small Finance Bank in just 8 years. 

• Suryoday Microfinance Bank provides a suite of credit products consisting of Vikas loans, MFI loans, shopkeeper loans, etc. for new customers.

• The bank aims to cater to the unserved and the underserved sections of society via innovative banking practices and continues to extend its reach in states where the bank does not have a presence. 

Some Key Products and services:

• Savings Accounts: The bank offers multiple types of savings accounts - Savings Adithya, Savings Classic, Savings Supreme, Savings Health and Wellness, BSBDA and other BSBDA small accounts. 

• Term deposits:  The bank offers domestic fixed deposits, non-callable fixed deposits (Retail), tax-saver fixed deposits, recurring deposits, and Form 15G/H.

• Loans:  The bank offers microfinance loans, commercial vehicle loans, home loans, secured business loans, individual loans, micro mortgages, two-wheeler loans, MSME loans, and working capital loans to MSMEs in collaboration with Lendingkart Finance Limited, personal loans in association with Money view, Transport Saathi (For Retail Transporters), and small business loans. 

• Investment and insurance products: The bank offers life insurance and general insurance policies for motor, health, travel, home protection, and merchant cover.

10. Utkarsh Small Finance Bank

• Utkarsh Microfinance Private Ltd was set up on April 30, 2016 in Varanasi, Uttar Pradesh as a Public Limited Company. 

• It got its certificate of incorporation from the Registrar of Companies. 

• The founding entity, Utkarsh CoreInvest Limited, began its operations as a non-banking financial company or NBFC in 2010. 

• On 7th October 2015, the promoter was given the RBI’s in-principal approval to establish a Small Finance Bank (SFB). This led to the incorporation of Utkarsh Small Finance Bank Limited as a wholly-owned subsidiary on 30th April 2016. 

• Subsequently, the bank received the RBI’s final approval to operate as an SFB on 25th November 2016. Consequentially, Utkarsh CoInvest Limited transferred its microfinance business to the bank, enabling the bank to commence operations on 3rd January 2017. 

• Further, the Bank was titled as a Scheduled Commercial Bank under the second schedule of the RBI Act, following a notification issued by the RBI on 4th October 2017. This was published in the Gazette of India on 7th November 2017. 

• Utkarsh Small Finance Bank’s banking operations are spread across India, encompassing 22 states and union territories via 686 banking outlets as of 31st March 2022. 

• The network consisted of 209 on-site and 6 off-site ATMs. Furthermore, as of the same date, the bank had set up 310 micro-ATMs. 

• Strikingly, As of 31 March 2021, 67.9% of the Gross Loan Portfolio (GLP) was from Uttar Pradesh, Bihar and Jharkhand respectively. 

Some products and services

• Savings account: The bank provides different types of savings accounts. The interest rate you can earn is upto 7.75%, and it gets credited quarterly.

• Deposits: The bank primarily offers fixed deposits and recurring deposits. Regular citizens can earn upto an interest rate of 8.50% p.a. on deposits of duration ranging between 7 days to 10 years. Senior citizens can earn upto an interest rate of 9.10% p.a. on deposits of duration between 7 days to 10 years. Recurring deposits offer interest rates ranging between 6.50% p.a. to 8.00% p.a. for regular citizens and 7.00% p.a. to 8.50% p.a. for senior citizens for tenures ranging between 9 months to 10 years. For durations upto 6 months, the interest rate is 7% p.a. Apart from these deposits, you have tax saver FDs and deposit lockers. 

• Loans: The bank offers several types of loans like home loans, gold loans, personal loans, retail loans against property, etc. 

11. Unity Small Finance Bank 

Key Details:

• Unity Small Finance Bank was founded by Centrum Financial Services Limited and BharatPe. 

• It was incorporated publicly on August 25, 2021

• This non-governmental entity is appropriately registered with the Registrar of Companies in Delhi. 

• The organization’s authorized share capital is Rs. 40,000,000,000 and the paid-up capital is ₹7,049,019,600. 

• The bank is majorly involved in various financial intermediation activities. 

• The address of the headquarters is 40, Basant Lok, Vasant Vihar, New Delhi, DL 110057, India. 

• Products and services offered by the bank include loans, deposits, accounts, investment plans, and lockers among others. 

Some products and services: 

• Deposits: The bank provides fixed deposits and recurring deposits at attractive interest rates. General FD rates range from 4.50% to 9.00% for tenures falling between 7 days to 10 years. Senior citizen FD rates range from 4.50% to 9.50% for tenures falling between 7 days to 10 years. Recurring deposits offered by Unity Bank come with flexible tenures ranging from 6 to 120 months. You can start a recurring deposit with a minimum investment of Rs. 1000 per month.

• Savings account: The bank provides three types of savings accounts - the regular savings account, Pearl account, and seniors account. The pearl account provides various features and benefits for women - Namely RuPay Platinum Debit card, lifestyle benefits, etc. The interest rates offered on this account are 6% p.a. for up to Rs. 1 lakh and range from 7.00% p.a. to 7.50% p.a. For amounts above Rs. 1 lakh to 5 crores. For amounts above 5 crores, the interest rate is 7.75% p.a. The seniors savings account is curated for those aged above 60 years. Senior citizens can enjoy an additional 0.5% interest rate to the usual rates. 

• Loans: Various kinds of loans are offered by Unity Small Finance Bank, and they are MSME loans, microfinance loans for women, supply chain finance (for MSMEs and large corporates to overcome working capital challenges), personal loans, and digital personal loans. 

12. Ujjivan Small Finance Bank 

Key details:

• Ujjivan Financial Services Limited (UFSL) commenced its operations as a Non-Banking Financial Company (NBFC) in 2005. 

• It was driven by the mission to provide a comprehensive suite of financial services to the “economically active poor”, a demographic underserved by the existing financial institutions. 

• After getting a license from the Reserve Bank of India (RBI), UFSL set up Ujjivan Small Finance Bank, which began its banking operations on 1st February 2017. 

• Ujjivan Small Finance Bank Limited (USFB-L) is one of the premier small finance banks in India. It is dedicated to serving the financially underserved sections of society thus fostering financial inclusion. 

Some products and services:

• Savings account:  The bank offers various types of savings accounts such as maxima savings account, privilege savings account, digital savings account, senior citizen savings account, Garima savings account, classic savings account, etc. You can earn an interest rate of upto 7.5% p.a. on the savings account. 

• Loans: The bank offers various types of loans including two-wheeler loans, home loans, micro group loans, Vikas loans, gold loans, and micro individual loans. 

• Insurance and investment: The bank offers varied types of insurance policies like life insurance, general insurance, and health insurance. It also offers investment policies like the Atal Pension Yojana, Demat and Trading, and the National Pension System.

Disclaimer: The products and services offered, interest rates on deposits, interest rates on savings accounts, and other information provided above are as of 28th May 2024 when this page was written and are subject to change. For exact details, contact the respective banks or refer to their websites. 

FAQs on Small Finance Banks in India

1. Who controls small finance banks in India?

Small Finance Banks (SFBs) are controlled by RBI. 

2. how many small finance bank in india?

As of the latest update from the Reserve Bank of India, there are 11 small finance banks operating in India. These banks are specifically licensed to enhance financial inclusion by providing essential banking services to underserved sectors, including small businesses, the unorganized sector, and low-income households. The 11 small finance banks in India are:

1. AU Small Finance Bank Limited
2. Equitas Small Finance Bank Limited
3. Suryoday Small Finance Bank Limited
4. Utkarsh Small Finance Bank Limited
5. Jana Small Finance Bank Limited
6. Unity Small Finance Bank Limited
7. Capital Small Finance Bank Limited
8. ESAF Small Finance Bank Limited
9. Ujjivan Small Finance Bank Limited
10. North East Small Finance Bank Limited
11. Shivalik Small Finance Bank Limited

3. Which small finance bank is best in India?

The best small finance banks in India are: 

• AU Small Finance Bank offers savings account interest rates up to 7.25% p.a. and fixed deposit (FD) rates up to 8.00% p.a., with senior citizens receiving up to 8.50%. The bank provides a Super Banking App and operates through 2,383 branches and ATMs. 

• Equitas Small Finance Bank provides FD interest rates up to 8.25% p.a. (and 9% p.a. for senior citizens) for 444 days, along with savings account interest rates from 3.50% to 7.80% p.a. 

• Utkarsh Small Finance Bank offers up to 7.75% p.a. on savings accounts and FD rates up to 8.50% p.a., with senior citizens benefiting from a rate of 9.10% p.a. Loans of up to ₹10 Crores are available, with flexible tenures up to 15 years. 

• Ujjivan Small Finance Bank provides FD rates of 8.25% p.a., with 8.75% p.a. for senior citizens, and savings account interest rates ranging from 3.50% to 7.50% p.a. 

4. What is the main objective of a small finance bank?

The main aim of a small finance bank is to provide basic banking services to the unorganized sector, MSMEs, small businesses, and the farming sector. 

 

Disclaimer: This page includes information that has been compiled from many sources and is only offered for informational purposes. Since this type of data might change over time, we cannot guarantee that the information supplied or included within it is accurate. It is anticipated that the user would confirm with the relevant source prior to taking any choices or actions.