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Big challenges before small finance banks

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Ujjivan Small Finance Bank Ltd, the fifth such bank in India and the largest among the five in terms of their small loan portfolio, will make its formal debut on Monday after running a pilot programme in five of its microfinance branches in Bengaluru. Professor Muhammad Yunus, a microfinance pioneer and founder of the Grameen Bank in Bangladesh, will inaugurate the bank. Like Equitas Small Finance Bank Ltd, which started operations in September, Ujjivan too listed its shares ahead of the bank’s launch to comply with the regulatory norms. Foreign stake in such banks is capped at 49% but most of the entities that have got a licence from the central bank to float small finance banks have higher foreign stakes. One of the ways of restructuring the shareholding pattern is to sell some of the foreign stake in the market to domestic investors. Jaipur-based AU Financiers (India) Ltd, which has got the final licence from the Reserve Bank of India (RBI) to start a small finance bank, too plans to enter the capital market soon.

For more on this story visit the following link: Big challenges before small finance banks

Source: Live Mint

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