Small finance banks want to peel off the ‘small’ label

Executives of SFBs requested Reserve Bank of India (RBI) officials to let them drop the ‘small finance’ tag at a recent meeting, two people aware of the matter said. Dropping the tag will improve branding and customer connect, and attract more current and savings accounts (CASA), the people said on condition of anonymity.

Created in 2016 to direct loans to smaller enterprises, farmers and under-served segments, SFBs are required to mention ‘small finance’ in their names, and keep at least 75% of their loans below Rs. 25 lakhs. Currently, India has a total of 10 SFBs, many of which started their journey as microfinance institutions.