Small Finance Banks: New Hope for the Unbanked?

Guidelines of RBI for licensing of SFBs states that the objective of setting up of small finance banks will be to further financial inclusion.

IFI Summit 2017 has arranged a plenary session discussing the so-far impact, implications and future prospects on #FinancialInclusion (F / T) by Small Finance Banks in the Indian economy.

SFBs

The objective mentioned above fitted well with the institutions that were granted license, as most of them were MFIs. It also created opportunities for them to be able to do things that were constraints as ‘NBFC-MFIs’ such as mobilizing savings. SFB was a legal form much-awaited and was cheered by the sector with great excitement and hope.

As most SFBs celebrate their first anniversary, it is an opportune time to assess whether these institutions are on course to fulfilling the above objective. It is important to understand if the change in legal form has resulted in any change in the mission, the delivery methodology or change in priorities.

Are SFBs still as committed to their core clientele that they started with or are the business compulsions veering them to other market segments?

This session explores the development in SFBs since their origin. The session will deliberate the direction that SFBs are heading; the challenges they are facing and the opportunities that they are leveraging.

 

Changing Contours of the Financial Sector Architecture: Small Tremors or Tectonic Shifts

Recent years have seen the kind of changes in the financial landscape at institutional level which appear to be unprecedented and fundamental in many ways

Given the importance of these changes, the Inclusive Finance India Summit 2017 has dedicated a plenary session lead by key banking sector front-runners towards Indian financial landscape going through a pivotal period and its implied future prospects for the country.

Reserve Bank of India (RBI) approved niche banks paving way for offering small-scale financial services in a more robust framework. We are witnessing an increasing confidence of the mainstream banks in the low-income segment, evident from the rising number of BC partnerships and banks’ acquisition of the Microfinance Institutions (MFIs). Tectonic image

Banking industry is also undergoing consolidation at a scale and pace not seen before. Government is all set to merge several Public-sector banks. SBI’s recent merger with its associate banks has already created a banking behemoth of the size India has not seen before, propelling it to top 50 banks globally. In this changing landscape, once ubiquitous Regional Rural Banks (RRBs) are struggling to find their relevance as they rapidly vanish. Their numbers are reaching a low of 56 and counting, only downwards.

Then of course there is much talked about digital financial services. When a large proportion of Indians had just learned to operate ATMs, mobile payments have begun to threaten their existence.

 

The session is going to discuss this changing landscape and assess if these are just ordinary and regular changes or if there is a fundamental shift happening and what it means for the future?