Small Finance Banks

In Q3FY26, credit growth surpassed Axis Direct's projections at 13%, led by retail lending. Public sector banks excelled, while SFBs saw a rebound. Axis Direct highlighted investment opportunities in the BFSI sector, recommending banks like Kotak Mahindra and SBI for potential gains.

India's small finance banks are ramping up hiring from larger banks to prepare for universal banking transitions. With a focus on strengthening leadership, these banks aim for significant growth.

Fino applied for an SFB licence in December 2023, betting that it could tap a large portion of its merchant network as an initial lending base as well as for loan collections and repayments.

AU Small Finance Bank received the Reserve Bank of India (RBI) ‘in-principle’ approval to transition into a ‘universal bank’ status on 7 August 2025. A small finance bank is given the approval to transition to ‘universal bank’ status on fulfilling the RBI-set guidelines and eligibility.

Small finance banks in the country are offering fixed deposit interest rates of up to 8.60% in 2025, making them an attractive option for conservative investors seeking higher returns.

ESAF Small Finance Bank's share price surged 11.5% to ₹34 after announcing the sale of a stressed asset pool worth ₹735.18 crore to an ARC. This includes ₹362.43 crore in NPAs and aims to improve asset quality.

Jana Small Finance Bank shares rose 6.5% to ₹553 after applying to transition into a universal bank. The bank has built a strong retail and MSME franchise since obtaining its SFB license in 2017, despite a 62% decline in net profit for Q1 FY25.

Jana Small Finance Bank reported a 17.91% drop in net profit to ₹110.6 crore for the December quarter. The bank's NII rose 8% to ₹593 crore, while GNPA increased to 2.8%. The total asset AUM reached ₹27,984 crore, reflecting 19% year-on-year growth.