SKS to set up small finance bank

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

The company informed the 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 the “RBI on November 27, 2014 and clarification issued on January 1, 2015”.

SKS president Dilli Raj told Business Standard that establishment of a bank was a “logical extension of our financial inclusion agenda”. He said SKS currently has a networth of Rs 1,000 crore as against the requirement of a minimum of Rs 100 crore networth for setting up small banks according to the RBI guidelines.

For the quarter ended December 2014, SKS 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 38 per cent to Rs 184.41 crore from Rs 133.31 crore.

The company stated in a press release that its portfolio, excluding the states of Andhra Pradesh and Telangana, registered a 35 per cent year-on-year increase to Rs 3,195 crore from Rs 2,364 crore in the third quarter of last year. In Q3 of FY15, loan disbursements stood at Rs 1,544 crore while net interest income was at Rs 96 crore.

As of December 31, 2014, SKS had a networth of Rs 998 crore and capital adequacy of 34.6 per cent. Cash and cash equivalents stood at Rs 746 crore.