'Universal banks are not in a position to understand the needs of small-value customers'.
RBI had given in-principle approval for ten institutions to start small finance banks in the country. ESAF Microfinance, among them, is set to launch its operations as a bank from March 17. In an interview, K. Paul Thomas, founder and chairman, ESAF Microfinance said: “We have an interesting and innovative social product in the offing that can disturb the market dynamics.” Excerpts:
What is the significance of a small finance bank in India?
The financial inclusion agenda was first mooted during the 2005 period. The Swaabhimaan campaign was the first such initiative to cover villages with banking facilities. The initiative proved to be a failure due to lack of financial literacy and technology related issues. A few years back, Prime Minister Narendra Modi furthered the agenda by launching Pradhan-Mantri Jandhan Yojana and later by sanctioning licences to launch Small Finance Banks and Payments Bank....................Read more
Source: The Hindu