Page 2 - Small Finance Banks

AU Small Finance Bank stock rallies over 6% on universal banking hopes

The central bank has laid down qualitative criteria of a satisfactory five-year track record, which will be evaluated post-application made by SFBs

Need more competition

Small finance banks have a clear path

RBI lays out norms for voluntary conversion of SFBs into universal banks

AU SFB, a few others seen as contenders for conversion

RBI invites pleas from eligible SFBs to become regular, universal banks

Reserve Bank of India on Friday invited applications from small finance banks meeting specified criteria, including a minimum net worth of Rs 1,000 crore, for becoming regular or universal banks. The RBI, in November 2014, issued the guidelines for licensing of small finance banks (SFBs) in the private sector. There are about a dozen SFBs, including Au Small Finance Bank, Equitas Small Finance Bank and Ujjivan Small Finance Bank. An SFB aiming to become a universal bank should have a minimum net worth of Rs 1,000 crore as at the end of the previous quarter (audited) and the shares of the bank should have been listed on a recognised stock exchange, the central bank said. It should also have a net profit in the last two financial years and GNPA and NNPA of less than or equal to 3 per cent and 1 per cent, respectively, in the last two financial years. Other conditions include a prescribed CRAR (capital-to-risk weighted assets ratio) requirement and a satisfactory track record of ...

Small finance bank stocks are on an uptrend. Does the rally have more legs?

Analysts believe that small finance banks have a much bigger role to play in the overall banking sector

Home loans: To top up or not to top up?

The home loan top-up, a kind of secured multipurpose personal loan, is on the regulator's radar. Rightly so

RBI rejects two applications for small finance bank under extant guidelines

The Reserve Bank of India has rejected two more applications, including that of Dvara Kshetriya Gramin Financial Services, for setting up small finance banks. Earlier in July 2023, it had rejected three applications. RBI had received about a dozen applications to set up banks under the guidelines for 'on tap' Licensing of Universal Banks and Small Finance Banks (SFBs). The guidelines for 'on tap' licensing of Universal Banks and SFBs in the private sector were issued on August 1, 2016, and December 5, 2019, respectively. In a statement on Friday, the RBI said the examination of two more applications for setting up a small finance bank has been completed as per the procedure laid down under extant guidelines. Based on the assessment of the applications, the central bank said it did not find applicants -- Dvara Kshetriya Gramin Financial Services Private Limited and Tally Solutions Private Limited -- suitable for granting of in-principle approval to set up a small finance bank. How

RBI turns down request to remove 'small finance' tag from bank name

Retaining it crucial given mandate for financial inclusion

SFBs securitise loans worth Rs 9,300 crore to generate liquidity

The securitisation volumes in Q4 FY24 witnessed healthy growth of 26 per cent over the preceding quarter, rising to Rs 48,000 crore

Sidbi plans to raise Rs 5,000 cr via rights issue next financial year

Small Industries Development Bank of India (SIDBI) on Tuesday said it plans to raise Rs 5,000 crore from rights issue next financial year to fund business growth. The refinancing entity for SME finance is witnessing a strong credit growth and to further grow the business, capital would be required, he said. The bank is looking to mobilise Rs 5,000 crore from rights issue in the next fiscal, SIDBI chairman and managing director S Ramann said on the sidelines of launch of a credit programme for Jan Aushadhi Kendras here. He said the government is the biggest shareholder and SIDBI has approached them requesting their participation in the rights issue, he said. Government of India holds a 20.85 per cent stake as of March 31, 2023. Besides this, State Bank of India owns 15.65 per cent, while the share of Life Insurance Corporation of India (LIC) stood at 13.33 per cent as of March 31, 2023. The rest is held by other Public Sector Banks (PSBs) and institutions. He said the loan book of

Securitisation of loans by SFBs to cross Rs 10,000 cr in FY2024: ICRA

Fundraising by small finance banks (SFBs) through securitisation is expected to exceed Rs 10,000 crore in FY2024 against Rs 6,400 crore in the previous year, rating agency ICRA said on Tuesday. The third quarter of FY2024 alone witnessed the quarterly record high securitisation volumes of about Rs 4,200 crore, ICRA said in a release. "The market share of SFBs in the securitisation market would accordingly touch a peak of 6 per cent in FY2024 from levels of sub-2 per cent prior to FY2022," it said. In FY2024, ICRA said six SFBs raised funds through this route against four in FY2023 and only two in FY2022. "The increase in the number of SFBs securitising their assets signals a deepening of the domestic securitisation market, as it provides them an alternative route to raise funds to sustain their growth momentum," it said. Abhishek Dafria, Senior Vice President and Group Head - Structured Finance Ratings at ICRA said the securitisation market has traditionally been dominated by ...

RBI may undertake comprehensive review of architecture of payment banks

Governance standards, viability of biz among priorities

Balance sheets of SFBs are larger than those of universal banks: Panel

Participants at a panel discussion at the Business Standard BFSI Insight Summit 2023 say that SFBs need diverse product lines

Non-executive directors' remuneration cap increased to Rs 30 lakh: RBI

The notification further stated that the banks are required to have suitable criteria for granting fixed remuneration to their NEDs, with the approval of their Board before any review of remuneration

NESFB offloads stressed micro-loans over Rs 500 cr to clean up books

To raise fresh capital upto Rs 200 crore

AU Small Finance Bank's advances rise 20% to Rs 67,624 cr in Q3FY24

According to the exchange filing, advances rose by 4 per cent sequentially from Rs 65,029 crore

SFBs can turn into universal banks, say experts at BS BFSI Summit 2023

There is nothing to stop our firm from turning into a Universal Bank, said Ittira Davis, managing director and chief executive officer of Ujjivan Small Finance Bank

BS BFSI Summit: From Sanjay Agarwal to Inderjit Camotra, meet SFBs experts

Small Finance Bank CEOs Panel's theme on October 31: Can SFBs become universal banks?

AU Small Finance Bank Q2 results: Net profit up 17% to Rs 402 crore

AU Small Finance Bank on Saturday reported 17 per cent rise in standalone net profit at Rs 402 crore for September quarter 2023-24 aided by improvement in interest income. The Jaipur-based lender had logged a net profit of Rs 343 crore in the year-ago period. Total income rose to Rs 2,957 crore from Rs 2,240 crore in the same period a year ago, AU Small Finance Bank said in a regulatory filing. Net interest income of the bank improved to Rs 1,249 crore from Rs 1,083 crore in September 2022. Net interest margin stood at 5.5 per cent at the end of September 2023. The bank's gross non-performing assets (NPAs) stood at 1.91 per cent of gross advances at the end of the September quarter 2023 as against 1.90 per cent a year ago. Net NPAs or bad loans rose to 0.60 per cent as against 0.56 per cent in the year-ago period. The Capital Adequacy Ratio of the bank decreased to 22.4 per cent from 23.3 per cent at the end of September 2022.

Top-flight PSB boards needed for resilience

Asset quality of lenders has improved, but financial resilience in a system is best built in good times. It is time for the RBI to press the governance accelerator