The Reserve Bank of India has issued a small finance bank (SFB) licence to a consortium of fintech company BharatPe and Centrum Financial Services Ltd.
- The new business entity Unity Small Finance Bank will see Centrum’s MSME and micro finance businesses merged into itself.
- The new entity will took over the assets and liabilities of the Punjab and Maharashtra Co-operative.
About Small Finance Banks
- Small Finance Banks is a specific segment of banking created by RBI under the guidance of Government of India with an objective of furthering financial inclusion.
- After the announcement during Union Budget for the year 2014-15, RBI issued the guidelines of Small Finance Bank in November 2014.
- Like other commercial banks, these banks can undertake all basic banking activities including lending and taking deposits.
- The main difference between Commercial Bank and Small Finance Bank is there is no limit for the capital acquired by a Commercial Bank whereas Small Finance Bank should pay up a minimum capital of 200 crores.
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