Top Small Finance Bank Stocks in India

Small finance banks in India are expected to grow their advances by a robust 25-27% in FY25, though a tad lower than the previous fiscal’s ~28% growth, according to CRISIL ratings. Under the Companies Act, 2013, small finance banks (SFB) operate as public limited companies providing banking services to rural and semi-urban regions. Small Finance Banks offer basic banking services, including loans and accepting deposits, especially targeting underserved segments such as micro and small industries, small businesses, small and marginal farmers, and unorganized sector entities. Keep reading to learn about small finance banks in India, small finance banks list, what is a small finance bank, and more in detail.

Small Finance Bank Industry in India - A Brief Overview

In November 2014, the RBI issued guidelines to boost the small finance banks in India. SFBs are established by the Reserve Bank of India (RBI) to strengthen the economy and promote financial inclusion. SFBs function within the regulatory framework of several laws and regulations, including the Banking Regulation Act of 1949, the Reserve Bank of India Act of 1934, the Foreign Exchange Management Act of 1999, and others. The primary focus of the small finance banks is to provide basic banking services to underserved and underprivileged sections. Usually, the branches of these small finance banks are present in remote areas to promote financial literacy, motivate savings, and facilitate account-opening processes.

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List of Small Finance Banks Stocks in India as per Market Capitalization

 Overview of Small Finance Banks Stocks in India 2024

1.  AU Small Finance Bank

AU Small Finance Bank was established in 1996 and is headquartered in Jaipur, Rajasthan. The bank offers its services in rural and semi-urban areas across 13 states. It offers various types of loans such as personal loans, home loans, vehicle loans, loans against vehicles,, and gold loans. Moreover, customers can also enjoy services related to savings and current accounts, ATMs, lockers, recurring deposits, fixed deposits, EMI calculators, interest calculators, etc. Moreover, you can opt for insurance services that cover life, health, motor, SME, pocket, and more. AU Small Finance Bank has more than 1000 offices and over 4,000 banking branches offering services to more than 3 million customers. With AU Small Finance Banks, you can enjoy modern-day banking services like net banking, video banking, WhatsApp banking, missed call banking, and mobile banking. 

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2. Ujjivan Small Finance Bank

Ujjivan Financial Services Limited (UFSL) began its operation as an NBFC in 2005. It caters financial services to the ‘economically active poor’ who lack sufficient banking, and support from financial institutions. Ujjivan Financial Services Limited is one of the renowned names in the microfinance business. It offers various banking services including personal banking, corporate banking, business banking, and rural banking. With Ujjivan Financial Services Limited, you can enjoy opening savings accounts, current accounts, and deposit accounts, along with services like third-party insurance product distribution, ATM or debit cards, and Aadhaar enrollment.

In 2017, Ujjivan Financial Services Limited received its small finance bank license offering services in 26 states and union regions with over 5.5 million customer base. With Ujjivan Small Finance Bank, you avail of different loans such as vehicle loans, home loans, gold loans, MSME loans, crop loans, Kisan Suvidha Loans, and more. Furthermore, it has around 441 ATMs, 18 ACRs, and two 24/7 phone banking units in Bangalore and Pune.

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3. Equitas Small Finance Bank

Incorporated on June 21^st, 1993, Equitas Small Finance Bank Limited previously operated as V.A.P. Finance Private Limited. Began offering full-fledged small finance bank services in 2016; headquartered in Chennai, Equitas Small Finance Bank Limited focuses on providing different types of loans including loans against property, housing loans, and agriculture loans for micro-entrepreneurs. It specializes in offering home loan and car loans and operates in two segments personal and business. Alongside, you can take advantage of other services provided by Equitas, such as healthcare, education, skill training centres and job fairs, particularly in South India.

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4. Jana Small Finance Bank

Starting its operations in 2018, Jana Small Finance Bank, headquartered in Bangalore, offers savings accounts, current accounts, deposits, loans, cards, online banking, payments, insurance, and safe deposit locker facilities. Its banking services include home loans, group loans, business loans, agricultural loans, gold loans, and two-wheeler loans. It has a strong presence in states like Maharashtra, Gujarat, Karnataka, and Madhya Pradesh, with a network of over 771 banking outlets across 22 states and two union territories, including 278 branches in unbanked rural centres.

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5. Utkarsh Small Finance Bank Limited

On April 30, 2016, Utkarsh Small Finance Bank Limited became a Public Limited Company, headquartered in Varanasi. it offers various banking and financial services. It focuses on serving unbanked customers in underbanked areas. Utkarsh Small Finance Bank Limited offers its services in personal banking, business banking and micro-banking including a range of banking products, including different types of savings accounts, recurring and fixed deposits, insurance and investments, loans, digital products, and more.

With Utkarsh Small Finance Bank Limited, you can enjoy different banking methods, including ATM banking, internet banking, mobile banking, UPI, etc.  The Bank provides types of loans, including loans against property, gold loans, home loans, etc., to more than 2.5 million customers with offices over 600 and over 300 ATMs. Moreover, Utkarsh Small Finance Bank Limited aims to empower women by offering financial literacy programs and loans tailored for women entrepreneurs.

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Conclusion
If you are looking to invest in small finance bank shares in India, you must understand the primary focus of the small finance bank and the services it offers to its customers. Also, investing in a small finance bank is a good choice as its focus is on finance inclusion and is supported by the Indian government. These small finance banks aim to provide services to underserved communities and promote economic growth. While investing, you must consider that the performance of these small finance banks is exposed to market risk. Hence, it is essential to understand the market and make decisions based on your financial capacity and financial goal. Also, you can always take advice from an expert to avoid any kind of misunderstanding or major loss.