Small Finance Banks were established with the objective of achieving financial inclusion. Small finance banks focus on providing credit to the unorganized sector, micro small and medium enterprises, small and marginal farmers, and small business units. You can read about the Types of Banks in India – Category and Functions of Banks in India in the given link.
Small finance banks can be promoted by societies, trusts, corporate, individuals. Small finance banks are established as per the Companies Act of 2013. They are regulated by the Banking Regulation Act of 1949 and Reserve Bank of India Act, 1934. Local Area Banks, Micro-Finance Institutions (MFI), and existing Non-Banking Financial Companies (NBFC) can apply to become small-finance banks.
Further readings:
- Granting License for Small Finance Banks by the Reserve Bank of India (RBI)
- SIDBI – Small Industries Development Bank of India & its Functions
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Related Links |
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Financial Inclusion – National Strategy for Financial Inclusion [UPSC GS-III] |
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Types of Non Banking Financial Institutions India – Functions & Objectives |
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