Page 33 - Banking Finance August 2025

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Must have met the prescribed capital adequacy norms. Minimum Capital Adequacy Ratio (CRAR) at 15% and Tier 1
CRAR at 7.5%.

Small Finance Bank (SFBs) operates in India - As of May 2025:

Sr. Small Finance Bank Foundation Operations Erstwhile Listed Eligible for
No. Year commen- Classification (Yes/No) Universal
cement Bank
Year as SFB Transition
1. Capital Small Finance Bank 2000 2016 Local Area Bank Yes No
2. Equitas Small Finance Bank 2007 2016 NBFC Yes No
3. AU Small Finance Bank 1996 2017 Asset Financing NBFC Yes Yes

4. ESAF Small Finance Bank 1992 2017 NBFC Yes No
5. Northeast Small Finance Bank 2017 2017 NBFC No No
6. Ujjivan Small Finance Bank 2005 2017 Urban Co-operative Bank Yes Yes

7. Fincare Small Finance Bank 2007 2017 NBFC (Now amalgam- NA NA
ated with AU SFB)
8. Suryoday Small Finance Bank 2005 2017 NBFC Yes No
9. Utkarsh Small Finance Bank 2009 2017 NBFC Yes No
10. Jana Small Finance Bank 2008 2018 NBFC Yes Yes
11. Shivalik Small Finance Bank 2009 2021 NBFC No No
12. Unity Small Finance Bank 2021 2021 Took over PMC Bank No No
Ujjivan SFB and AU SFB has applied to the RBI to seek approval for voluntary transition from a Small Finance Bank to
Universal Bank.
Jana SFB may apply to the RBI to seek approval for voluntary transition from a Small Finance Bank to Universal Bank.

Small Finance Bank Leads the First-Ever Help Groups (SHGs), Joint Liability Groups (JLGs), and MSMEs.
These banks are key enablers in India's journey towards
Bank Rescue in India: becoming a developed nation. In a growing economy like
Most Small Finance Banks (SFBs) started as NBFCs, but India, it is crucial for the financial sector-especially Small
the 12th SFB - Unity Small Finance Bank - stands out as Finance Banks-to strike a balance between profitability and
a unique case in Indian banking history. It became the fulfilling social objectives.
first and only SFB to acquire a financially distressed co-
operative bank, the Punjab and Maharashtra Coopera- By strategically focusing on sectors that yield high social
tive (PMC) Bank, through a merger. impact, these banks can ensure that their financial growth
aligns with the broader goal of inclusive development. Fur-
This milestone is now seen as a benchmark for resolv-
ing banking crises and safeguarding depositor interests thermore, to enhance the accessibility of affordable credit,
it is essential for Small Finance Banks to actively engage in
in India's financial sector.
extending credit under various Government-Sponsored
Schemes, supporting vulnerable sections of society and pro-
Conclusion: moting equitable financial access for all.
Small Finance Banks, with their strong outreach to rural and
semi-urban areas, play a pivotal role in extending credit to Reference:
individuals, underserved communities, entrepreneurs, Self- Various Sources.

30 | 2025 | AUGUST | BANKING FINANCE