RBI's in-principal nod to Payment Banks and Small Finance Banks

With financial inclusion in focus, the Reserve Bank of India (RBI) in September this year granted in-principle approval to 10 applicants to set up small finance banks. The move aims to bring the weaker sections of the society under formal banking.

In August, the RBI granted approval to 11 entities, including Reliance Industries, Aditya Birla Nuvo, Airtel, Vodafone M-pesa and India Post among others, for launching payments banks.

Also Read: RBI gives nod to 11 including RIL, Airtel and Vodafone for payments bank

While small banks can perform all activities similar to commercial lenders, though on a restricted scale, payments banks cannot undertake lending operations.

Besides, IDFC and Bandhan have been given full-fledged banking licences.

The applicants selected for setting up small finance banks include Au Financiers Ltd, Capital Local Area Bank, Disha Microfin, Equitas Holdings, Ujjivan Financial Services, Utkarsh Micro Finance, ESAF Microfinance and Investments, Janalakshmi Financial Services, RGVN Microfinance and Suryoday Micro Finance.

Also Read: RBI grants in-principle nod to 10 entities for small banks