Fincare Small Finance Bank (SFB) has been accorded the status of a Scheduled Commercial Bank by Reserve Bank of India (RBI) according to a notification released by the Central Bank. The Bank’s name has been included in the Second Schedule to the Reserve Bank of India Act, 1934, as published in the Gazette of India (Part III – Section 4) dated April 13 – April 19.
As a Scheduled Commercial Bank, Fincare SFB can now broad-base its lines of funding and liquidity facilities. The Bank can issue Certificates of Deposits, and get access to interbank borrowings at competitive interest rates, enabling it to bring down its cost of funds. As a Scheduled Bank, Fincare SFB can also get deposits from new sources such as governments, Public Sector Undertakings, Corporates, Mutual Funds, Insurance Companies and other market participants that are mandated to transact with Scheduled Commercial Banks. The Bank will be able to benefit from the Liquidity Adjustment Facility (LAF) and the Marginal Standing Facility (MSF) under which it can borrow and lend with RBI. The Bank can also issue Bank Guarantees and letters of credit and becomes eligible to offer tax-saver fixed deposits to its customers.
Rajeev Yadav, the MD & CEO of Fincare Small Finance Bank said in a statement, “We are grateful to RBI for extending the status of Scheduled Commercial Bank to Fincare SFB. This status will help the Bank expand our liabilities base at more competitive rates – be it through new instruments such as CDs, access to new sources of liabilities such as mutual funds, government, and public sector institutions, or through access to the RBI’s facilities for liquidity management. We are also thankful to our customers who have supported the Bank in its journey during the last 22 months – as a Scheduled Commercial Bank, we will be able to serve them better”.
Fincare SFB, earlier Disha Microfin, was one of the 10 entities to receive the Small Finance Bank license from the RBI in September 2015 and commenced banking operations in July 2017. The Bank serves over 15.5 lakh customers through a network of 570 banking outlets operating across the states of Gujarat, Tamil Nadu, Karnataka, Kerala, Maharashtra, Madhya Pradesh, Andhra Pradesh, Telangana, Rajasthan, and the National Capital Region. The Bank’s gross loan portfolio grew at 65 percent during the year, to close at Rs. 3,530 Crore, as on March 31, 2019. The Bank has also garnered deposits of Rs. 2,043.2 Crore as on March 31, 2019, a growth of over 181 percent y-o-y, with retail deposits comprising 58 percent of the total deposits.