Small Finance Banks (SFBs) have reshaped India’s banking sector, expanding financial access for underserved communities, small businesses, and low-income individuals. These banks play a vital role in advancing financial inclusion, supporting rural economies, and empowering entrepreneurs.In a country as vast as India, extending the right banking services to every nook and corner is an extremely difficult task. And especially considering the unserved and underserved sections of the population, small business units, marginal farmers, micro and small businesses, without the right banking infrastructure, a majority of the population will have to suffer. This is where Small Finance Banks come into picture, reaching out to the unbanked and under-banked regions of our country.
What are Small Finance Banks (SFBs)?
In a nutshell, Small Finance Banks (SFBs) are niche banks who can provide basic banking services such as acceptance of deposits and lending. And importantly, banks with the SFB license are eligible to operate as a Small Finance Bank.
Who is eligible to start a Small Finance Bank?
- Localites with 10+ years of experience in Banking and Finance
- Companies governed or owned by residents of that particular area
- Existing Non-Banking Finance Companies (NBFCs), Micro Finance Institutions (MFIs), and Local Area Banks (LABs)
Before we jump into our main topic – Best Small Finance Banks in India, let us first know:
List of Most Famous SFBs of India
1. AU Small Finance Bank

Founded by Mr. Sanjay Agarwal, a merit-holder Chartered Accountant, AU Small Finance Bank has made banking more accessible for individuals and small businesses with limited financial options. Since becoming a small finance bank in 2017, the Jaipur-based bank has focused on providing savings accounts, deposits, and loans tailored to customer needs. With a strong digital platform and a customer-first approach, AU SFB ensures seamless and convenient banking, helping people take charge of their financial growth. Bridging the financial barrier, AU Small Finance Bank serves low and middle income individuals and micro and small businesses that have limited or no access to formal banking and finance channels.
Growth Stats – 1,042 touchpoints in 21 states and 3 union territories and still growing (last update September 2023)
2. Capital Small Finance Bank

Capital Small Finance Bank, India’s first SFB, was founded by Sarvjit Singh Samra and began operations in 2016 after transitioning from Capital Local Area Bank. It has secured its place among the Best Small Finance Banks in India due to its strong foothold in rural and semi-urban banking, offering attractive interest rates on savings and deposits while providing tailored loan solutions for small businesses. Known for its personalized service and emphasis on financial literacy, the bank has built a strong customer base across Punjab and nearby regions. With one of the lowest credit costs in its segment, it efficiently manages loans, ensuring financial stability and trust among its customers.
Growth Stats – 172 branches and 174 ATMs
3 .Equitas Small Finance Bank

Equitas Small Finance Bank, founded by PN Vasudevan, contributes to societal welfare by integrating financial services with social impact initiatives. Equitas Small Finance Bank has emerged as a frontrunner among the Best Small Finance Banks in India and is known for its customer-friendly approach along with it’s good asset quality performance. It also offers a wide range of banking and financial services. With a special focus on empowering women entrepreneurs and small businesses, the bank provides microfinance, digital banking solutions, and high-interest savings accounts to ensure economic progress at the grassroots level. Formerly known as Equitas Microfinance Ltd, Equitas Small Finance Bank was established in 2016, with its headquarters in Chennai. Despite their initial goal of building a network of branches across 11 of Indian states, the goal fell short. But the SFB managed to transition into a tech-oriented organization, with Equitas Small Finance Bank’s 83% of transactions being conducted online.
4. ESAF Small Finance Bank

ESAF Small Finance Bank, led by K. Paul Thomas, has built its reputation through its commitment to financial inclusion and social transformation. Founded in Kerala, ESAF Small Finance Bank has been a key player in community banking and social impact lending. It focuses on microloans, MSME (Micro, Small and Medium Enterprise) lending, and agricultural finance, catering to economically weaker sections. ESAF SFB is known for its commitment to financial empowerment and sustainable banking practices. Its innovative financial products and branchless banking services make it one of the most trusted and among one of the best Small Finance Banks in India. Post considering the impressive work carried out by ESAF towards rural upliftment, the RBI issued an in-principle SFB Licence in October 2015. Now with over 56 lakh and growing customer base, the ESAF Small Finance Bank has experienced a remarkable growth and consolidation in the last few years, being known as one of the best Small Finance Banks of the country.
5. Fincare Small Finance Bank

Fincare Small Finance Bank, established in 2017, focuses on serving the underbanked segments at the base of the economic pyramid, along with mass retail and micro & small enterprises. With over 500 branches and a workforce exceeding 5,000 employees, the bank operates across 13 states. It provides a wide range of innovative banking solutions, including savings and current accounts, fixed deposits, NRI fixed deposits, recurring deposits, microloans, cash overdrafts, loans against property, gold loans, institutional finance, and two-wheeler loans, catering to diverse customer needs.With Rajeev Yadav at the helm, Fincare Small Finance Bank has positioned itself as one of the most technologically advanced institutions among the Best Small Finance Banks in India. The bank provides digital-first banking services, including instant fixed deposits, AI-driven customer support, and doorstep banking. With a strong presence in rural and semi-urban areas, it provides high-yield savings accounts, recurring deposits, and microloans. Fincare SFB’s digital savings account, instant fund transfers, and biometric-enabled banking ensure ease of access for its customers. The bank’s rapid expansion and customer-centric financial solutions make it a significant player in India’s SFB segment.
6. Jana Small Finance Bank

Jana Small Finance Bank, formerly a microfinance institution, received SFB status in 2017. Founded by Ramesh Ramanathan, Jana Small Finance Bank has been recognized as one of the Best Small Finance Banks in India due to its extensive outreach and commitment to financial inclusion.With a presence in over 20 states, Jana SFB focuses on financial inclusivity through loans for MSMEs, affordable housing, and individual banking solutions. It has gained recognition for its robust digital banking services and customer outreach programs, particularly in underserved regions.
7. Northeast Small Finance Bank

Spearheaded by Rupali Kalita, North East Small Finance Bank is among the Best Small Finance Banks in India, dedicated exclusively to strengthening the banking infrastructure in the northeastern states. Established in 2017, the bank focuses on providing financial services to underserved communities, particularly small traders, self-employed individuals, and farmers. It offers microloans, savings accounts with competitive interest rates, and rural banking initiatives to drive economic growth in the region. With a strong presence across Assam, Meghalaya, Tripura, and other northeastern states, the bank continues to bridge the financial gap and promote inclusive development.cess in the region through microloans and easy-to-use digital banking platforms.
8. Shivalik Small Finance Bank

Shivalik SFB, led by Sujit Kumar Varma, became India’s first urban cooperative bank to transition into an SFB, setting a new benchmark among the Best Small Finance Banks in India. Originally a cooperative bank, it transitioned into an SFB in 2021. With a strong focus on fintech solutions, Shivalik SFB provides paperless account opening, digital lending, and seamless banking services through mobile apps. Its technology-driven approach makes it a modern alternative in the Best Small Finance Banks in India category.
9. Suryoday Small Finance Bank

Suryoday Small Finance Bank, founded by Baskar Babu, has earned its position among the Best Small Finance Banks in India through its deep-rooted commitment to microfinance and community banking. Suryoday Small Finance Bank has built a strong reputation for microfinance and retail banking services. It offers attractive interest rates on deposits and specializes in microloans for women entrepreneurs, self-help groups, and small traders. The bank’s extensive financial literacy programs and doorstep banking services have expanded its reach to the most financially excluded populations.
10. Utkarsh Small Finance Bank

Utkarsh Small Finance Bank primarily serves low-income and rural customers with microloans, affordable housing finance, and high-interest savings accounts. Under the leadership of Govind Singh, Utkarsh Small Finance Bank has strengthened its presence as one of the Best Small Finance Banks in India by focusing on microfinance solutions for low-income individuals. Established in Varanasi, it has grown into a leading SFB with a significant presence in northern and central India. The bank continues to expand its financial inclusion initiatives with user-friendly digital banking solutions and savings schemes to encourage financial growth and self-sufficiency.
11. Unity Small Finance Bank

Unity Small Finance Bank, a joint initiative by Centrum Financial Services and BharatPe, has rapidly gained recognition among the Best Small Finance Banks in India for its fintech-driven banking model. Under the guidance of Murali Natarajan, the bank specializes in digital lending, SME financing, and innovative business banking solutions, providing seamless financial services to entrepreneurs and businesses. It offers a range of services, including high-yield fixed deposits, digital lending, and investment solutions. With a strong fintech-driven model, Unity SFB aims to bridge the gap between traditional banking and modern financial technology, providing seamless experiences for its customers.
12. Ujjivan Small Finance Bank

Founded by Samit Ghosh, Ujjivan Small Finance Bank has made a significant impact in the microfinance sector. Ujjivan Small Finance Bank, headquartered in Bengaluru, has a deep-rooted focus on financial inclusion and customer-friendly services. Offering a mix of microfinance, SME loans, and retail banking solutions, Ujjivan SFB has gained a loyal customer base across urban and rural regions earning its place among the Best Small Finance Banks in India. With its specialized loan products for small businesses, women entrepreneurs, and lower-income families, Ujjivan ensures financial inclusion while maintaining an exceptional digital banking experience. Its digital banking initiatives, including mobile banking and doorstep services, have enhanced accessibility for financially underserved communities.
In Conclusion
All in all, in this blog we have listed the Best Small Finance Banks in India above based on key parameters such as financial performance, customer outreach, and their impact on underserved communities. While these banks play a crucial role in driving financial inclusion, they are yet to gain widespread popularity among Indian consumers. To better understand the advantages and challenges of banking with SFBs and why to and why not to invest in them, you can refer to our detailed article on the Benefits and Advantages of Opening an Account in a Small Finance Bank.
So here are the best SFBs we think are doing more than what is expected of them in this time of change, but for your knowledge, we have listed down all the Small Finance Banks of our country in alphabetical order in the table below.
List of Best Small Finance Banks in India 2024 ( Alphabetical order )
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But before we go you might have a few questions in mind regarding SFBs, and here are the most asked ones.
FAQ :
Can you get a loan from a small finance bank without collateral?
Yes, you can get loans from small finance banks without collateral, often referred to as unsecured loans, which rely on your creditworthiness and repayment capacity rather than assets
What is the maximum amount insured in Small Finance Banks?
In small finance banks, deposits up to ₹5 lakh per depositor per bank are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC), providing a safety net for small depositors.
What are the interest rates offered by small finance banks?
Small finance banks generally offer competitive interest rates on fixed deposits (FDs), with rates ranging from around 3.75% to 8.60% per annum for general citizens and slightly higher for senior citizens, depending on the tenure and the specific bank.
What are the limitations of a Small Finance Bank?
- Small finance banks cannot give all the loans to any segment like commercial banks. They have to give 75% of their loans to unorganized sectors.
- Small finance banks cannot give credit cards.
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