RBI names 10 companies to set up microfinance banks

Ten entities, including Ujjivan Financial Services and Equitas Holdings, today got RBI's approval to set up Small Finance Banks to provide basic banking services to small farmers and micro industries.

Other entities to get the Reserve Bank's nod are Au Financiers (Jaipur), Capital Local Area Bank (Jalandhar), Disha Microfin (Ahmedabad), ESAF Microfinance (Chennai), Janalakshmi Financial (Bengaluru), RGVN (North East) Microfinance (Guwahati), Suryoday Micro Finance (Mumbai) and Utkarsh Micro Finance (Varanasi).

The "in-principle" approval will be valid for 18 months to enable these entities comply with the guidelines on Small Finance Banks, RBI said in a statement. Last month, the central bank had granted approval to 11 entities for launching Payments Banks.

Besides, two new entities-- IDFC and Bandhan -- have been given full-fledged banking licence.

The Small Finance Banks can provide basic banking services like accepting deposits and lending to the unbanked sections such as small farmers, micro business enterprises, micro and small industries and unorganised sector entities.

"Going forward, the Reserve Bank intends to use the learning from this licensing round to appropriately revise the guidelines and move to giving licences more regularly, that is, virtually on tap," RBI said.

The central bank had received 72 applications for setting up small finance bank licences.