Disha Microfin, an Indian microfinance institution (MFI), recently received a license from the Reserve Bank of India (RBI) to open a “small finance bank” that it is launching under the name Fincare. The license allows the institution to accept deposits, access international funding sources, offer debit cards and provide services via automated teller machines. Fincare Small Finance Bank CEO Rajeev Yadav reportedly added, “The small finance bank licence will enable us to expand our product basket to include liabilities products, higher ticket loans to micro and small enterprises, as well as gold and affordable housing loans.” RBI granted the license to Disha Microfin two years after giving the MFI “in principle approval” to receive it.
Founded in 2009, Disha reported to the US-based nonprofit Microfinance Information Exchange (MIX) total assets of USD 46 million, a gross loan portfolio of USD 48 million and approximately 203,000 active borrowers as of 2015.
The Reserve Bank of India (RBI) is India’s central banking authority. Established in 1935, it undertakes consolidated supervision of the financial sector comprising commercial banks, non-banking finance companies (NBFCs) and other financial institutions. Its tasks also include consolidating accounting standards, resolving cases of banking fraud, monitoring non-performing assets and supervising the rating model for the banking sector. As of 2016, RBI reported total reserves of INR 24.3 trillion (USD 366 billion).
By Jacob O’Driscoll, Research Associate
Sources and Additional Information
Disha Microfin Receives Final Nod From RBI for Small Finance Bank
Disha Microfin Private Limited
Livemint: What to Expect from Small Finance Banks
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