SKS to set up small finance bank

The microfinance company says the bank will be a 'logical extension' of its financial inclusion agenda

SKS Microfinance Limited, the only listed microfinance company in the country, has decided to set up a small finance bank.

The company informed BSE that its board, at a meeting held on Thursday, had approved a proposal for making an application to the Reserve Bank of India (RBI) for getting a licence for small finance bank based on the guidelines for such banks issued by "RBI on November 27, 2014 and clarification issued on January 01, 2015".

SKS president Dilli Raj told Business Standard that establishment of one such bank was a "logical extension of our financial inclusion agenda". He said that SKS currently has a net worth of Rs 1,000 crore as against the requirement of a minimum of Rs 100-crore net worth for setting up small banks as per the RBI guidelines.

Raj said that SKS was now gearing up to fulfill all the requirements for establishing the bank and would apply to the RBI by February 7, the deadline set for making such applications.

For the quarter ended December 2014, SKS had reported a 91 per cent rise in net profit at Rs 41.05 crore compared with a profit after tax of Rs 21.42 crore posted in the same quarter previous year.

The company's income from operations during the period under consideration increased by 38 per cent to Rs 184.41 crore from Rs 133.31 crore.