Top 10 Small Finance Banks in India
- March 08, 2025
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Top 10 Small Finance Banks in India
Small Finance Banks (SFBs) are financial institutions that provide banking services to underserved sections of the country. The Reserve Bank of India regulates all the SFBs.
SFBs are registered as public limited companies under the Companies Act, 2013, and are licensed under Section 22 of the Banking Regulation Act 1949. In this blog post, we will provide you the list of top 10 small finance banks in India.
List of Best Small Finance Banks in India
SFBs allocate a significant portion of their lending towards priority sectors, such as agriculture, microenterprises, and small businesses. We have provided some of the leading SFBs in our list of top small finance banks in India:
1. AU Small Finance Bank
AU Small Finance Bank Limited is a leading scheduled commercial small finance bank in India. It is the largest tech-led SFB, based in Jaipur. AU SFB was originally established as "AU Financiers (India) Ltd" in 1996. On April 19, 2017, it became a full-fledged SFB.
In the same year, AU SFB was listed on the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE), and it was first named a Fortune India 500 company. In the Fortune India 500 (2019) list, AU SFB came in at number 355 with total B/S assets of ₹31,198.68 crore (US$3.6 billion). CRISIL Ratings, ICRA Ratings, India Ratings, and CARE Ratings have all given AU Bank a "AA-/Stable" long-term credit grade.
AU SFB provides services to micro and small firms as well as low and middle-income individuals who have little to no access to traditional banking and financing channels. The Bank provides payment goods and services, deposits, and loans. The successful acquisition of Fincare SFB by AU SFB, the first merger of its kind involving SFBs, took effect on April 1.
2. Capital Small Finance Bank
Capital Local Area Bank came into existence in 2000, and was primarily operational in certain districts of Punjab, such as Jalandhar, Kapurthala and Hoshiarpur until 2013. The bank extended its operations in other districts of Punjab i.e., Ludhiana and Amritsar, in 2013.
Following in-principle approval in September 2016, the RBI authorized Capital Local Area Bank under Section 22(1) of the Banking Regulation Act, 1949. As the country's first SFB, it began operations on April 24, 2016, under the new name Capital SFB. In addition to the 49 Capital Local Area Bank branches that already existed, Capital SFB opened 10 new branches on the day of its founding. Now, the bank operates through 100+ branches.
3. Ujjivan Small Finance Bank
Ujjivan Small-Finance Bank Limited is an Indian SFB based in Bangalore, Karnataka. It began operations in February 2017, and is one of the largest small finance banks in India. Ujjivan Financial Services holds approx. 80% stake in the SFB. According to Section 22(1) of the Banking Regulation Act 1949, Ujjivan SFB can carry out SFB operations. RBI gave an in-principle approval to Ujjivan Financial Services to set up a small-finance bank in October 2015. The SFB was given the status of a scheduled bank by the Reserve Bank of India in August 2017.
By 2018, the bank became present in 24 states and union territories, 209 districts of the country and provided services to about 3.7 million customers. In October 2019, the Securities and Exchange Board of India gave approval to Ujjivan SFB for Initial Public Offering (IPO). The SFB decided to raise Rs. 1,200 crores through the IPO. Bidders oversubscribed to Ujjivan SFB IPO by 166 times by the last bidding date i.e., 4 December 2019.
Ujjivan SFB provides a wide range of products and services like savings account, fixed deposits, recurring deposits, MSE loans, housing loans, micro loans, vehicle loans, home loans and small business loans among others. It also provides internet banking, phone banking and mobile banking facilities to its customers.
4. Equitas Small Finance Bank
Equitas Small Finance Bank (formerly known as Equitas Microfinance Ltd) is a SFB established as a microfinance lender in 2016. Its headquarters is in Chennai, and is a subsidiary of holding company Equitas Holding Ltd.
Equitas SFB began banking operations on 5 September 2016 after receiving RBI license on 30 June 2016. It became a scheduled bank on 4 February 2017. It became a public company after releasing its IPO in October 2020.
In 2021, Equitas SFB and neobanking startup Niyo collaborated to introduce NiyoX, a mobile banking platform. The bank and HDFC Bank announced their co-branded credit card on November 23, 2021. The boards of both Equitas SFB and Equitas Holding Company authorized a reverse merger in 2021. March 2023 saw the completion of the merger.
5. Northeast Small Finance Bank
Northeast Small Finance Bank was founded in 2016. It is a relatively new SFB than other SFBs. But despite being new in the game, it has emerged as a critical player in ensuring financial inclusion in the Northeastern region of India.
It was established with a clear objective to provide a variety of financial services to the segments of society that are currently underserved. Northeast SFB has consistently worked towards reducing the financial gap and promoting the society’s economic growth. The Bank started its banking operations on October 17, 2017, according to an RBI press release. The bank's extensive array of programs designed to empower underserved areas and advance sustainable development shows how dedicated it is when it comes to inclusive banking.
The objective of NESFB is to become the go-to bank for all financial needs by offering timely, suitable products and services through doorstep banking and technology utilization, which will contribute to the long-term, sustainable development of the community as a whole. NESFB dedicates itself to promoting good change and advancing the socioeconomic prosperity of the nation by encouraging a culture of innovation, integrity, and customer centricity.
From individual retail customers to Micro, Small, and Medium-Sized Enterprises looking for credit access, North East SFB provides a wide range of financial solutions designed to satisfy the unique requirements of different client groups. Notably, the bank offers senior citizens interest rates on special duration fixed deposits that are among the best in the market, with maximums of 9.50%.
In order to assist working capital needs, NESFB also offers Cash Credit and Enterprise Development Loans. This helps to make sure that its financial solutions advance financial inclusion. The bank places considerable emphasis on increasing employment possibilities, which is another indication of its dedication to northeastern regional development. As evidence of its commitment to supporting local employment, NESFB increased its personnel by more than 200 roles throughout the northeastern region in 2024. These initiatives demonstrate NESFB's strategic emphasis on inclusive growth as it broadens its reach.
In the northeastern part of India, North East SFB is essential to the advancement of socioeconomic development and financial inclusion. The bank has made strides in assisting underserved communities and promoting sustainable growth through its array of focused banking projects. The goal of NESFB is still to enable people to attain greater economic stability and financial security by offering easily accessible financial services.
6. Unity Small Finance Bank
Unity SFB is a new age SFB. It is Headquartered in Mumbai, Maharashtra. It is a RBI-licensed Scheduled Bank that began operations on 1 November 2021.
Resilient Innovations Private Limited (BharatPe) and Centrum Financial Services Limited are joint investors in Unity Bank. In order to provide customers with an intelligent, easy, and excellent banking experience, Unity Bank provides a range of services and features, such as savings, current and NRI accounts, fixed and recurring deposits, microloans, MSME loans, digital lending, supply chain finance, and insurance solutions.
Unity SFB is a bank for all. It ensures ease of accessibility, reach and speed for its comprehensive banking services. Inderjit Camotra is the managing director and CEO of Unity SFB. In August 2024, the Reserve Bank of India reappointed him for a second term.
7. Suryoday Small Finance Bank
Suryoday SFB is a new age SFB that was converted from a micro finance institution. It mainly offers banking services to the underserved customers. It was incorporated in 2008 with the name ‘Suryoday Micro Finance Private Limited’.
As a SFB, Suryoday offers various types of loans, such as microbusiness loans, affordable housing loans and loans for commercial vehicles. It offers savings accounts, term deposits, fixed deposits and current accounts. Additionally, it also offers debit card, life and general insurance and mutual funds to meet different requirements of customers. Other services of Suryoday SFB include digital banking, mobile technologies and NPCI payment systems.
In 2015, Suryoday SFB became a public limited company. It received approval from the Central Bank to start SFB operations in 2016. The bank focuses on growing a stable and sustainable Current Account Savings Account base. It serves customers in the unbanked and underbanked segments.
Suryoday SFB has a collaborative organizational culture that gives priority to career progression, recognition, and work life balance. It has a diversified asset portfolio that primarily focuses on retail operations.
8. Utkarsh Small Finance Bank
Utkarsh SFB came into existence in 2016. It is one the best SFBs in India when it comes to providing banking and financial services. Its banking outlets are spread across 26 states and UTs, making it one of the top SFB banks in the country. Utkarsh SFB’s product offering consists of liability products in the form of deposits that it sources from customers and asset products that it advances to customers mostly in underbanked and unbanked areas.
Some of the segments of Utkarsh SFB are Corporate/Wholesale Banking, Retail Banking, Treasury, and Other Banking Operations. Lending, deposits, and other banking services offered to the Bank's corporate clients are all included in its Corporate/Wholesale Banking section. Lending, deposits, and other banking services offered to the Bank's retail clients via a branch network are all included in its Retail Banking section. The statutory liquidity ratio (SLR) and non-SLR investments, reserve requirement maintenance, and resource mobilization from other banks and financial institutions are all included in its Treasury segment.
9. Shivalik Small Finance Bank
Mr. Yashvir Kumar Gupta founded Shivalik SFB Bank in 1998, with Mr. Suveer Kumar Gupta serving as its MD & CEO until its transition into Shivalik SFB. Shivalik SFB became the first SFB in India to transition from an Urban Cooperative Bank, bringing 25 years of experience in offering retail banking products and services. It focuses on technology and operates on Infosys Financial Core Banking and Digital Banking Suite. Its cloud-based architecture provides unparalleled flexibility, enabling efficient expansion and cost-effective scalability.
The Bank is a direct member of the National Financial Switch and operates on all retail payment platforms, including IMPS, NEFT/RTGS, and UPI. With 68 branches and 93 exclusive Business Correspondent Branches spread throughout Uttar Pradesh, Uttarakhand, Madhya Pradesh, the National Capital Region (NCR), Telangana, and Haryana, the bank serves more than 6 lakh unique customers.
10. Fincare Small Finance Bank
Fincare Small Finance Bank is a retail bank that provides banking services to the underserved rural segments across the nation. It provides a variety of financial services and products, like loans, debit cards and savings accounts. In the loan domain, it offers services, such as microfinance loans, housing loans and loans against property. Fincare provides gold loans and secured loans as well. It also offers current and savings accounts, fixed and recurring deposits, and safe deposit lockers to its customers. It also issues physical and virtual debit cards that customers can use for digital transactions.
The unbanked and underbanked people in rural areas are the main objective of Fincare SFB. Additionally, it serves the micro and small business and mass retail markets. Fincare SFB is a scheduled commercial bank. Fincare Business Services Limited is the holding company of Fincare SFB. Among the investors of Fincare Business Services Limited are Tata Opportunities Fund, TA Associates, and True North.
Conclusion
Small Finance Banks serve low-income households, small businesses, and rural sections of society. The top 10 SFBs in India include AU SFB, Capital SFB, Ujjivan SFB, Equitas SFB, and Unity SFB, among others. The Reserve Bank of India approves and authorizes all these banks to provide financial services and products.
If you want to provide loans and other financial services, you can start an NBFC. For assistance in securing NBFC license from RBI, connect with Registrationwala’s consultants!
Disclaimer: This article is based on the author’s personal opinion and may or may not represent views of the general public, institutions or organizations.
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