Definition of Small Finance Bank
Small Finance Banks are a type of bank established by the Reserve Bank of India (RBI) under the direction of the Indian government with the goal of promoting financial inclusion by providing basic banking services to underserved and unserved segments such as small businesses, small and marginal farmers, micro and small industries, and unorganized entities. These banks, like other commercial banks, can engage in all fundamental banking activities, such as lending and accepting deposits. RBI published Small Finance Bank rules in November 2014, after the announcement of the Union Budget for the year 2014-15. On November 24, 2014, 72 organizations from various segments applied for the license, but only 10 were granted it. Savings Account, Current Account, Locker, ATM, Fixed Deposit, Recurring Deposit, and all forms of asset-backed loans including Vehicle Finance, MSME loans, and SME loans are available at these Bank.