The Reserve Bank of India has granted “in-principle” nod to 10 applicants thereby selecting just one in seven applicants who were eyeing a licence to start a small finance bank. This made it a more hotly contested new niche banking category for driving financial inclusion in the country.
Last month RBI approved 11 of the 41 applicants to start a payments bank, a separate category of niche bank in the country.
While telecom service companies emerged as clear favourites for payments banks, microlenders were the chosen set securing eight of the in-principle licences.
The central bank has given 18 months to comply with the requisite guidelines laid down last November. Once set up, these organizations will work as regular banks accepting deposits and lending to unserved and underserved sections. They will have to make more of priority sector lending and also keep at least 50 per cent of loan portfolio of advances up to Rs 25 lakh.
Here’s a quick look at those picked by RBI for small finance banks (in alphabetical order)