The Reserve Bank of India has granted in principle approval to 10 entities to set up small finance banks to provide basic banking services to small farmers and micro industries.
The in-principle approval will enable these entities comply with the guidelines on Small Finance Banks and will be valid for 18 months.
10 entities are
Au Financiers (India) Ltd, Capital Local Area Bank, Disha Microfin Private Ltd, Equitas Holdings P Limited, ESAF Microfinance and Investments Private Ltd, Janalakshmi Financial Services Private Limited, RGVN (North East) Microfinance Limited, Suryoday Micro Finance Private Ltd, Ujjivan Financial Services Private Ltd and Utkarsh Micro Finance Private Ltd.
As per RBI guidelines, the small finance banks can provide basic banking services in order to promote financial inclusion.
It will include services like accepting deposits and lending to the unbanked sections such as micro business enterprises, small farmers, micro and small industries and unorganised sector entities.