Small Finance Bank in India a Supportive Measure for Micro and Small Enterprises

Small Finance Bank is a specialized segment of banking created by the Reserve Bank of India (RBI) with an aim to strengthen the Indian economy. Such banks intend to execute the concept of financial inclusion by mainly undertaking the basic banking activities to under-served and underprivileged sections of the country.Subsequently, the SFBs cater to the sections like small business units, micro and small enterprises, small and marginal farmers, and the unorganized sector.These banks also undertake the basic banking activities such as lending and accepting deposits just like other commercial banks.The RBI issued the guidelines of the Small Finance Bank in November 2014, just after the announcement of the Union Budget for 2014-15.Around 72 entities from across the segments applied for the license, while only 10 of them were provided the license of operations.