Skip to content
Free updates Login
BankingNABARD / RBI

VFS Capital Pulls Out of Small Finance Bank Licence Race

28 October 20251 min read
BANKING & FINANCEVFS Capital PullsOut of SmallFinance BankLicence Race28 October 2025safalsetu.com

Why in the news

A microfinance NBFC dropped its bid to become a small finance bank, an application RBI had earlier received.

About VFS Capital

  • NBFC-MFI headquartered in Kolkata, founded in 1995.
  • Gives microcredit to women entrepreneurs and small businesses; present in 13+ states.

About SFBs

  • Niche banks for financial inclusion, serving small businesses, marginal farmers, micro and small industries and the unorganised sector.
  • RBI regulates them.
  • Must be public limited companies under the Companies Act, 2013.
  • At least 50% of loans up to ₹25 lakh.

On-tap licensing

  • Brought in December 2019; applications possible whenever an eligible entity is ready, replacing batch rounds.
  • Applicants can be NBFCs, MFIs or Local Area Banks; promoters need 10 years of banking or finance experience.

Exam angle

  • Regulator: RBI.
  • Minimum capital: ₹200 crore.

Test yourself

1. What is the minimum paid-up capital required for a small finance bank per the VFS Capital news notes?

SFBs need minimum paid-up capital of ₹200 crore.

2. What share of ANBC must small finance banks lend to the priority sector?

SFBs must maintain 75% of ANBC for priority sector lending.

3. When were RBI’s on-tap licensing guidelines for small finance banks introduced?

The notes say on-tap licensing began in December 2019.

This topic is part of Daily Current Affairs 28 October 2025 (15 topics).

All topics of the dayDay quizOctober 2025

Read more