Seeking to promote financial inclusion, the RBI has granted approval to 10 entities, in principle, to set up small finance banks to provide basic banking services to small farmers and micro industries. The approval granted yesterday includes Ujjivan Financial Services and Equitas Holdings.
The approval has been granted within a month of the RBI giving nod to 11 entities for launching Payments Banks. The RBI statement said that the in-principle approval will be valid for 18 months to enable these entities comply with the guidelines on Small Finance Banks.
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.
The central bank had received 72 applications for setting up small finance bank.