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Four Uttar Pradesh-based financial institutions have applied for small finance bank licences, the list of which was released by the Reserve Bank of India (RBI) last week.
A total of 72 companies from across India are in fray for the same licence, which is touted to transform the financial landscape to benefit the bottom of pyramid sections.
However, no company from Uttar Pradesh figures among the 41 companies vying for the payments bank licence.
In fray for small finance bank licence from the state are Sonata Finance, Lucknow; Proficient Leasing and Finance, Allahabad; S E Investments, Agra; and Utkarsh Micro Finance, Varanasi.
In November, RBI had introduced the concept of niche banking in India by issuing norms for payments and small finance banks to allow mobile firms and supermarket chains to enter the banking arena and cater individuals and small businesses. The move, aimed at deepening financial inclusion and boost saving habits, had come within seven months of RBI issuing two full-fledged banking licences in April after a gap of over a decade.
According to guidelines, those seeking to set up these two new categories of banks were required to have a minimum Rs 100 crore of capital and fulfill necessary ‘fit and proper’ criteria.
The existing non-banking financial companies and micro finance lenders had been allowed to set up small finance banks, while large public sector enterprises and big industrial houses would not be allowed to establish such banking entities.
Talking to Business Standard, Sonata Finance Managing Director Anup Singh said he was confident of getting the licence from RBI. “We are already working in micro finance in six states, including Uttar Pradesh.”
The company has 200 branches, of which 100 are based in Uttar Pradesh. “In case we get the licence, we would focus on Uttar Pradesh and Bihar and gradually expanding to other states,” Singh said.
