Small Finance Banks (SFBs) have become vital players in India’s banking sector, focusing on extending financial services to underserved and unbanked populations, including small businesses, farmers, and low-income individuals. As of March 31, 2024, the branch network of SFBs had more than doubled over the past five years, reaching approximately 7,400 branches, with over half located in rural and semi-urban regions.
In the fiscal year 2024, SFBs experienced a robust credit growth of around 28%, driven by their expansion into new asset classes such as mortgage loans, loans to Micro, Small, and Medium Enterprises (MSMEs), vehicle loans, and unsecured personal loans. This diversification led to the share of these new segments crossing approximately 40% by March 2025, doubling from March 2020 levels.
In this article, we will explore the top 10 Small Finance Banks in India, highlighting their unique contributions, services, and impact on the country’s financial ecosystem.
Why Small Finance Banks Are Gaining Popularity in India
Rapid Expansion: The number of Small Finance Bank branches has grown significantly, with over 7,400 branches across India as of 2024.
Better Interest Rates: These banks offer higher interest rates on savings accounts and fixed deposits compared to traditional banks.
Support for Small Businesses: They provide microloans and business loans with flexible repayment options to small enterprises and self-employed individuals.
Digital Banking Innovations: Many SFBs are adopting AI-driven chatbots, paperless banking, and instant account opening services.
Strong Financial Performance: Despite being relatively new, SFBs have shown impressive growth in assets and profitability, making them key players in the banking sector.
How to Choose the Right Small Finance Bank for Your Needs
Check Interest Rates: Compare savings and deposit interest rates to maximize your returns.
Evaluate Loan Products: Look for banks that offer the best terms on home, business, or personal loans.
Assess Digital Banking Features: Choose a bank that provides seamless online and mobile banking services.
Consider Customer Service: Read customer reviews and check branch accessibility for better service experience.
Review Fees and Charges: Understand transaction fees, account maintenance charges, and loan processing costs before making a decision.
List of Top 10 Small Finance Banks in India
1. Shivalik Small Finance Bank
As an urban co-operative bank Shivalik Small Finance Bank runs its headquarters from Uttar Pradesh to become the first small finance bank in India. Shivalik SFB uses its cooperative banking experience to deliver digital banking services for urban and semi-urban customers. Shivalik SFB delivers accessible financial services to micro and small enterprises and self-employed individuals while serving staff members and professionals who receive salaries.
The digital approach at Shivalik SFB enables customers to access instant online account registrations and make UPI-based payments alongside receiving AI-assisted customer support. Shivalik SFB offers its customers deposit options with competitive interest rates through its attractive saving schemes. Shivalik SFB achieves enhancement of its Indian banking sector presence through its delivery of traditional banking foundations merged with contemporary digital platform solutions.
Services Provided:
- Savings and Current Accounts
- Fixed and Recurring Deposits
- Business and Personal Loans
- Digital Banking Services
- Insurance and Investment Solutions
Website: https://www.shivalikbank.com
2. Capital Small Finance Bank
Capital Small Finance Bank began its operations as the initial small finance bank in India with headquarters situated in Jalandhar, Punjab during 2016. The establishment began as a regional bank until it became an SFB. Through their rural and semi-urban banking strategy the institution delivers banking services to populations who live at the basic levels of society.
Through its customer-oriented strategies Capital SFB provides both competitive loan schemes and a broad selection of deposit and savings options to its clients. The financial institution operates throughout Punjab through extensive locations while it extends operations to additional states while prioritizing personal banking relationships. The financial institution maintains focus on agricultural financing together with medium-sized enterprise financing which allows many small companies and farmers to establish financial stability.
Services Provided:
- Savings and Fixed Deposit Accounts
- Agriculture and SME Loans
- Home and Vehicle Loans
- Digital and Internet Banking
- Wealth Management and Investment Services
Website: https://www.capitalbank.co.in
3. North East Small Finance Bank
North East Small Finance Bank (NESFB) operates as India’s first small finance bank which originates from the northeastern region and maintains its headquarters at Guwahati in Assam. The bank initiated its operations in 2017 with the purpose of serving the financial requirements of North East residents who reside in isolated rural communities. The bank drives financial inclusion through its offering of economical banking products that serve small businesses combined with farmers and self-employed individuals.
NESFB demonstrates strength through its specialized service of microloan solutions and farm-based financial products that fuel business development for both farmers and small company owners. NESFB added digital banking solutions to its infrastructure which provides mobile app and internet banking access to its customers. The firm maintains regional presence as a bush bank while fueling the financial development process in North Eastern India through its swift expansion.
Services Provided:
- Savings and Fixed Deposit Accounts
- Microloans and Agriculture Loans
- Business Loans for Small Enterprises
- Digital and Mobile Banking
- Insurance and Pension Products
Website: https://www.nesfb.com
4. ESAF Small Finance Bank
The leadership of ESAF Small Finance Bank in India, based at Thrissur in Kerala, established their mission to serve underprivileged communities through financial services for those without bank access. ESAF initiated as a microfinance organization and became a complete small finance bank in 2017 to offer additional banking solutions.
The financial institution distinguishes itself through its deep social dedication by developing financial solutions for people with limited income and small enterprises and agricultural producers. ESAF SFB acts as an ethical financial institution that provides sustainable banking solutions while also offering specific loans to support rural business owners.
Customers who invest in the bank can access both cost-competitive savings options and fixed deposit accounts which give them optimal returns on their funds. South India serves as ESAF SFB’s main operating location while the organization uses technology to improve banking services for additional regions beyond its core market.
Services Provided:
- Savings and Fixed Deposit Accounts
- MSME and Agriculture Loans
- Housing and Gold Loans
- Digital and Internet Banking
- Insurance and Pension Schemes
Website: https://www.esafbank.com
5. Fincare Small Finance Bank
The institution started as a microfinance institution which received its small finance bank license in 2017. Bengaluru serves as the base for the bank while its successful banking solutions reach individual customers as well as micro-enterprises along with rural communities. Fincare SFB implements technology-based banking services that allow customers to open new accounts instantly and make paperless transactions through biometric systems.
Customers choose Fincare Savings Bank because of its outstanding savings and fixed deposit returns that provide excellent investment yields. Fincare SFB provides simple access to credit through their forms of financing microloans, in addition to offering MSME loans, affordable housing loans, and Student Friendly Loans. The expanding network of branches combined with their digital banking focus enables Fincare SFB to deepen its market impact in the Indian banking sector.
Services Provided:
- Savings and Fixed Deposit Accounts
- Microloans and MSME Loans
- Affordable Housing Loans
- Digital and Mobile Banking
- Insurance and Investment Services
Website: https://www.fincarebank.com
6. Suryoday Small Finance Bank
Suryoday Small Finance Bank established in 2017 has become one of the most customer-oriented small finance banks operating in India. The original microfinance institution grew to become Suryoday Small Finance Bank when it started providing multiple retail banking services to low-income customers.
Suryoday SFB draws customers because it provides high-interest savings accounts and fixed deposit schemes for lucrative investment opportunities. The bank focuses on digital banking transformation through its provision of instant account opening and mobile banking services and simple UPI payment solutions.
Services Provided:
- Savings and Fixed Deposit Accounts
- Microloans and Business Loans
- Vehicle and Home Loans
- Digital Banking Solutions
- Insurance and Wealth Management
Website: https://www.suryodaybank.com
7. Jana Small Finance Bank
The former Janalakshmi Financial Services under its new name Jana Small Finance Bank operates as a leading SFB in India through its commitment to financial inclusion. Jana SFB established operations in 2018 with large-scale banking services that serve communities who have limited access to essential banking.
Jana SFB serves as a provider of reasonable credit solutions to micro along with small enterprises which helps local businesses achieve growth. Jana SFB supplies digital banking solutions alongside its innovative digital offerings to provide customers exceptional banking convenience via internet banking and mobile banking services.
Services Provided:
- Savings and Fixed Deposit Accounts
- Microfinance and Business Loans
- Home Loans
- Digital Banking Services
- Insurance and Investments
Website: https://www.janabank.com
8. Equitas Small Finance Bank
Equitas Small Finance Bank, headquartered in Chennai, has been a pioneer in providing banking services to micro and small businesses since its inception. As one of the Small Finance Banks in India, it initially operated as a microfinance institution, supporting economically weaker sections with small-ticket loans. The bank has since diversified its offerings, providing a full range of banking solutions to individuals and businesses.
Equitas SFB has embraced digital banking with features such as facial recognition for transactions, contactless payments, and instant account opening via mobile applications. The bank’s emphasis on financial inclusion, combined with its strong digital presence, makes it one of the most preferred SFBs in India.
Services Provided:
- Savings and Current Accounts
- Fixed and Recurring Deposits
- Home Loans and Business Loans
- Gold Loans
- Digital Banking and Payments
- Insurance and Mutual Funds
Website: https://www.equitasbank.com
9. Ujjivan Small Finance Bank
Ujjivan Small Finance Bank became a microfinance institution before its transformation into an SFB in 2017. Ujjivan SFB maintains its headquarters in Bengaluru while offering financial products that focus on reaching population segments with lower economic status at economical prices.
Ujjivan Small Finance Bank operates extensive services throughout both urban and semi-urban as well as rural regions and has earned recognition through its specific financial solutions provided for all communities.
Customer convenience along with digital banking stands as a principal advantage of Ujjivan SFB. Ujjivan SFB provides banking services through their multilingual mobile application platform that enables customers from different language backgrounds to access banking features. The emphasis on financial literacy programs at Ujjivan SFB has enabled thousands of low-income population and small businesses to move into formal banking services.
Services Provided:
- Savings and Fixed Deposits
- Micro and Small Business Loans
- Home Loans
- Vehicle Loans
- Digital and Mobile Banking
- Insurance and Investment Services
Website: https://www.ujjivansfb.in
10. AU Small Finance Bank
AU Small Finance Bank began operatioins as AU Financiers which was an NBFC until it transitioned into a small finance bank in 2017. The headquarters of AU SFB rests in Jaipur Rajasthan while the bank established itself throughout India through its rapid expansion and wide product offerings.
The bank approaches customers first while focusing on digital-first principles to enable smooth banking services through groundbreaking digital products. AU SFB offers customized loans as well as deposits and investment products to meet the requirements of retail customers alongside micro-enterprises and small businesses.
AU SFB maintains market leadership in the SFB sector thanks to its solutions based on technology alongside branchless banking service delivery and its operations in semi-urban and rural locations.
Customers enjoy efficient support through video banking video banking services combined with instant account opening and AI-powered chatbots which are part of the digital banking features this bank provides. Through its extensive range of loan products such as vehicle loans and business loans and gold loans the institution extends formal credit to multiple businesses and individuals.
Services Provided:
- Savings and Current Accounts
- Fixed and Recurring Deposits
- Business and Personal Loans
- Vehicle Loans
- Gold Loans
- Digital Banking Services
- Credit and Debit Cards
Website: https://www.aubank.in
Conclusion
In conclusion, Small Finance Banks in India have revolutionized the banking sector by bridging the gap between traditional banking and financial inclusion. These banks primarily serve small businesses, micro-entrepreneurs, farmers, and low-income groups, ensuring that even the most remote areas have access to financial services.
By offering high-interest savings accounts, affordable loans, and cutting-edge digital banking solutions, SFBs have emerged as strong alternatives to traditional banks. Whether you’re looking for a high-return savings account, a business loan, or seamless digital banking, these top 10 Small Finance Banks in India offer diverse financial solutions to meet your needs.
FAQs
Are Small Finance Banks safe for depositing money?
Yes, Small Finance Banks are regulated by the RBI, ensuring their compliance with banking norms and financial stability. Additionally, deposits in SFBs are insured up to ₹5 lakh per account by the Deposit Insurance and Credit Guarantee Corporation (DICGC), just like in regular banks.
Do Small Finance Banks offer loans like traditional banks?
Yes, Small Finance Banks provide a range of loan products, including personal loans, business loans, home loans, gold loans, and microloans. They are known for their quick processing and accessibility, especially for small businesses and self-employed individuals.
Can I open a savings or current account in a Small Finance Bank?
Yes, Small Finance Banks offer both savings and current accounts with attractive interest rates. Many SFBs also provide digital banking services, allowing customers to manage their accounts online or via mobile apps.
