Hello friends, at present, almost banks of the government and private sector are giving very little interest on the amount deposited by the consumers, that is, the interest rate on the deposit is continuously decreasing. Apart from Savings Account, Fixed Deposit-FD and Recurring Deposit-RD also have lower interest rates than before. While some Small Finance Banks By giving interest on savings account at the rate of 7 percent.
In such a situation, if we talk about State Bank of India-SBI, the largest bank of the government sector, then it is also giving interest at the rate of 3 to 4 percent on the savings account. In such a situation, the question arises, what is a small finance bank, and how is it paying more interest rate on deposits than other banks. Along with this, we will also talk about how many small finance banks in India.
i.e., List of Small Finance Banks in India 2022.
What is a Small Finance Bank?
Small Finance Bank is called ‘Small Finance Bank’ in Hindi and Small Finance Banks are like other commercial banks, but compared to other banks, the scope of their transaction is small i.e., limited. For example, with commercial banks, you can do transactions of crores of rupees in a day, but you cannot transact so much amount from small banks. In fact, along with opening savings accounts, such banks give them the facility of providing loans. However, the business activities of small finance banks are limited as compared to large size commercial banks.
In the year 2015, a total of 10 small finance banks were licensed by the central government, but according to the condition of the Reserve Bank of India, such banks are not allowed to give loans of more than Rs 25 lakh only. If we say in simple language, then there is a ban on giving big loans to small banks. It is often seen that there are many types of problems in fraud and recovery in large loans given by banks, whereas it is almost impossible to come across such problems in small banks.
Purpose of Small Finance Bank
A large part of India’s population lives in rural areas, and it is not possible that banks can be operated at all places in rural areas. In such a situation, the people living in the village are deprived of the services provided by the bank from opening their account. If some people keep their bank account, then they do not deposit and withdraw money regularly, due to which people living in rural areas are not able to take advantage of the banking system.
In such a situation, small bank plays an important role and it allows people to open savings account, fixed deposit (FD), recurring deposit (RD) account in the bank. Along with this, you can get the facility of debit card and check book as per your convenience. Apart from this, you can also take the facility of mobile banking and internet banking.
The main objective of giving license to small banks by the government is to provide the facility of banks to every person living in the country. Along with this, loans have to be made available to farmers, small businessmen living in rural areas. For your information, let us tell you that small banks do business in such areas, where the reach of big commercial banks is very less.
Control and Monitoring of Small Finance Banks
Small finance banks are fully controlled by the Reserve Bank of India i.e., RBI, along with it also monitors it. For such banks, very strict guidelines have been issued by the Central Bank, under which it is quite safe to invest in a small bank or open a savings account.
How safe are small bank deposits?
In small i.e., small finance banks, the amount up to Rs 5 lakh is as safe as the State Bank of India (SBI) or private sector banks in the government sector. The main reason for this is that small banks are directly under the supervision of the Reserve Bank of India. Actually, the amount of up to five lakh rupees in a small finance bank is insured under the Deposit Insurance and Credit Guarantee Corporation (DICGC).
Most of the people think that when the big banks of the country are not giving 7 to 8 percent interest rate on deposits, then how can these small banks give more interest rate than other big banks. This means investing in it is not less than any risk. While this is not the case at all, because like other banks, the RBI control is also on the small bank.
PSUs i.e., Public Sector Undertakings and large private banks have cash i.e., cash in large numbers, due to which they do not show much interest in depositing money from investors, whereas in small banks the exact opposite happens i.e., on small bank deposits. pays special attention Due to which they offer customers higher interest rates on deposits than other big banks.
List of Small Finance Banks in India 2022
The following banks in India have been licensed by RBI under the small bank category:
List of Scheduled Small Finance Banks
Name of the Bank
Au Small Finance Bank Limited
Capital Small Finance Bank Limited
Equitas Small Finance Bank Limited
Suryoday Small Finance Bank Limited
Ujjivan Small Finance Bank Limited
Utkarsh Small Finance Bank Limited
ESAF Small Finance Bank Limited
Fincare Small Finance Bank Limited
Jana Small Finance Bank Limited
North East Small Finance Bank Limited
Shivalik Small Finance Bank Limited