Small Finance Banks

Rise in provisions & shrinking NII weigh on bottom-line

Small Finance Banks (SFBs) are keen to evolve into universal banks but seek regulatory flexibility and a relaxed path to capital adequacy norms

Chief executives of Small Finance Banks welcome move to allow them to transition to universal banks, but ask for glide path to lower capital adequacy norms vis-a-vis large banks

The central bank has refused approval for Dia Vikas Capital's proposed 5% stake purchase, prompting ESAF SFB's board to review its promoter scheme and next steps

As of June 2025, home loans, according to the Equirus note, grew 12.8 per cent y-o-y to Rs 41.2 trillion, led by state-owned banks (+15.5 per cent y-o-y) and NBFCs / state finance banks

Small Finance Banks reported a 76 per cent drop in Q1 net profit as provisions surged and net interest income weakened, while gross NPAs jumped nearly 70 per cent year on year

The push comes amid RBI's final licence approval and intensifying competition

Slice Small Finance Bank has turned profitable on a monthly basis and is aiming to close FY26 in the black, a top official has said. The entity, which came out of a surprising merger between the fintech Slice and the North East SFB a few months ago, is adequately capitalised and not looking to raise any capital, its executive director Rajan Bajaj told PTI. The current focus is to build a pan-India business using the low-cost digital channels, and the entity is not interested in any more mergers, Bajaj said, adding that it may look at transitioning to a universal bank in the next five years. Before the merger, the North East SFB had reported a loss of Rs 441 crore, and Slice was also reporting losses. "We have turned profitable post-tax on a monthly basis and will close the year in profits," Bajaj said. The bank is adequately capitalised and the buffers will also be supported by the profits, he added. As per recent media reports, the bank was aiming to raise up to USD 300 million

RBI reports sDQI for scheduled commercial banks improved to 89.3 in March 2025; small finance banks scored above 90, reflecting higher data accuracy and compliance

The RBI requires SFBs to provide a detailed rationale for their desire to convert into a universal bank. Those with a diversified loan portfolio will be preferred

Leading car maker Maruti Suzuki India Ltd has partnered with private sector Equitas Small Finance Bank to offer vehicle financing options to its customers, a company official said on Friday. A memorandum of understanding between the two entities was signed with an aim to provide retail financing options for new cars, used cars and commercial vehicles. "The collaboration is set to enhance the accessibility and affordability of Maruti Suzuki vehicles for a broader range of customers," a company statement here said. The Chennai-headquartered Equitas Small Finance Bank would leverage the growing customer base of the bank to benefit diverse Maruti Suzuki customer profiles and offer them a range of comprehensive financing solutions. Maruti Suzuki India Ltd Senior Executive Officer Partho Banerjee exchanged documents with Equitas Small Finance Bank's retail assets head Jagadesh J in the presence of representatives of both organisations. "Our collaboration will enable us to reach an even

Jana Small Finance Bank has applied to the RBI for voluntary transition to a universal bank, meeting key financial criteria including NPAs below regulatory thresholds for two years

Banks such as Punjab & Sind Bank, Canara Bank, Union Bank of India, and Punjab National Bank have asked their circle heads to stay in their zonal offices

Unity Small Finance Bank on Monday reported an 83 per cent jump in its net profit to Rs 264 crore for the March quarter. Centrum Financial Services promoted bank had earned a net profit of Rs 144 crore in the year-ago period. During the quarter, the bank's total income rose significantly to Rs 977 crore against Rs 438 crore a year ago, Unity Small Finance Bank said in a statement. Its operating profit rose to Rs 347 crore during the period under review from Rs 166 crore a year ago. For the entire financial year 2024-25, the bank reported a 10 per cent increase in its profit to Rs 482 crore from Rs 439 crore in the previous fiscal. The bank's total income during the financial year rose to Rs 2,837 crore compared to Rs 1,632 crore a year ago.

Jana Small Finance Bank will join AU Small Finance Bank and Ujjivan Small Finance in the list of the small finance banks that are seeking a universal banking licence from the RBI

With this fund raise, AU SFB has achieved one of the largest bond issuances by any small finance bank, with the deal closing on the last working day of the financial year FY25

Bad loans grow sequentially and annually

One major benefit of becoming a universal bank is that public perception will change

We achieved an 8 per cent growth in deposits on a quarter-on-quarter basis, maintaining a retail-centric focus, said Sarvjit Singh Samra, MD & CEO, Capital Small Finance Bank

Lender offers interest rate of 8.80% on fixed deposits for general citizens and 9.30% on FDs for senior citizens on select tenures