By FMTeam To be honest, yes, there are so many benefits of going with a small finance bank option than a traditional bank, like low balance requirement, high interest rates on deposits, best financial services even to your doorsteps, customized credit products, and whatnot. Right? And thankfully, there are literally dozens of good small finance banks in India right now that are operational and serving millions of people, especially those who are kinda excluded by the main banking system in the country. So, come with us as we talk about these top 10 leading small finance banks in India as of 2024. Alright, here we go now.
1. AU Small Finance Bank
The biggest one is AU Small Finance Bank which is India’s largest and most significant small finance bank and is straight out of the city of Jaipur, Rajasthan. You see, originally a vehicle finance company, AU Financiers, AU made the transition to banking in 2017 and quickly rose to the top, you know? Right now though, with approximately 1,000 branches across 21 states and 3 union territories, AU offers a full range of financial services from savings and current accounts to competitive fixed deposits and retail loans.
2. Equitas Small Finance Bank
The runner-up aka the 2nd spot holder, Equitas Small Finance Bank, Chennai is also amongst the pioneers of microfinance transformation into a banking giant in the country. The bank is quite famous for its high-interest savings accounts, featuring rates from 5% to 7.8%, and it also offers fixed deposits of up to 9%. For sure, individuals and corporate clients alike are served by Equitas through its diverse programs.
3. Ujjivan Small Finance Bank
Number three goes to Ujjivan Small Finance Bank based in Bengaluru which is extremely well-known, particularly for its stress on the financial inclusion of low-income groups, you know? Just so you know though, Ujjivan started as a non-banking financial company (NBFC) and became a bank in 2017, expanding its operations to over 600 locations in India. Like, one of the focused services Ujjivan has for these marginalized sectors is microloans, comprising a significant part of the bank’s total portfolio featuring Vikas loans. Not just that though, on deposits, it competes with the best in the sector through interest rates of 7.5%.
4. Utkarsh Small Finance Bank
Next on the list, Utkarsh Small Finance Bank, which is in Varanasi, India, has become well-known, especially in the northern part of the country. Though initially, it was started as a microfinance institution in 2009 and then it changed to a bank in 2016. Now, it is popular for providing high deposit rates of 8.5% for Fixed Deposits (FDs) and 7.75% for savings accounts, you know? And it is a fact that HDFC Life and other investors are backing Utkarsh, which aims to address the basic financial needs of underprivileged areas, facilitating the growth of small businesses, as well as empowering the poorest families in the region.
5. Suryoday Small Finance Bank
In the fifth position, Suryoday Small Finance Bank, based in Navi Mumbai, Maharashtra engages in an extraordinary approach to banking by giving low-income communities the tools they need to succeed, but how’s that? Well, the bank offers an account with an interest rate of 6% while senior citizens can even make fixed deposits at a whopping 9.25%. For their part, microloans, vehicle loans, and shopkeeper loans are on offer, which caters to small entrepreneurs and individuals who wish to access cheap financing, you know?
6. Capital Small Finance Bank
At number six, the first small finance bank in India, Capital Small Finance Bank, is located in Jalandhar, Punjab. The bank had a huge impact on the semi-urban and rural areas, as well as being the first small finance bank in India. Besides savings and current accounts with competitive interest rates and customized options like Capital Saver accounts, the bank had a large reach in non-urban areas. Not just that though, right now as of 2024, Capital Small Finance Bank has over 170 branches.
7. ESAF Small Finance Bank
Our seventh-best choice ESAF Small Finance Bank, located in Thrissur, Kerala, is an entity that takes pride in a strong social responsibility component, but what do we mean by that? Well, initially set as a non-profit organization, ESAF became a full-fledged bank in 2017. Its offering of savings accounts with innovative features aimed at women, senior citizens, and lower-income clients is unique. Also, their flagship Hrudaya Deposit scheme, which is basically people’s support for the social welfare projects of the bank, is very encouraging.
8. Jana Small Finance Bank
You must have heard of Jana Small Finance Bank, right? You see, established in Bengaluru, Jana’s main strength was being a general-purpose cooperative banking institution in a country of smallholders that comprises 80% of the population. Right now though, it has over 700 branches of this bank all over the country. Being committed to the development of rural areas, it has bought out low-cost saving SDR certificates for the rural poor and made use of its Bangla labor for high-yielding fixed deposits.
9. North East Small Finance Bank
North East Small Finance Bank is the only bank in the country that has its emphasis on the Northeast of India, you know? It was established in 2017 and is headquartered in Guwahati, Assam. Sure, it has been serving the poor, marginalized, and rural communities with diverse financial products that it innovatively designed. And just so you know, the North East Small Finance Bank was set up as part of the government’s initiative to empower the poor to reach out for better livelihoods.
10. Unity Small Finance Bank
Last but not least is Unity Small Finance Bank, a 2021 establishment by Centrum Financial Services and BharatPe. Despite being a fresh act in the business, the company has influenced the market by directing the streamlining of tech solutions for banking. With this one, the attractive FD rates provided by the bank, which can be 9% for elderly people, as well as its online-first approach like that of the opening of a mobile account and advanced borrowing via the Internet are among the few things that make it a good option.
Conclusion
That’s all. So, we don’t know whether you were in search of this list for investment purposes or just wanted to know about good small finance banks to open an account in, we truly hope that this post helped you out in some way. Alright, we’ll see you in the next one.