NE's small bank aims 250 branches by 2020

RGVN (North East) Microfinance Limited, the only micro-finance company from the region to be selected by the RBI to set up a small bank, aims to have 250 branches and 8.25 lakh customers by 2020.

By Our special correspondent in Guwahati
  • Published 18.09.15
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Guwahati, Sept. 17: RGVN (North East) Microfinance Limited, the only micro-finance company from the region to be selected by the RBI to set up a small bank, aims to have 250 branches and 8.25 lakh customers by 2020.

The RBI yesterday decided to grant "in-principle" approval to 10 applicants to set up small finance banks under the "guidelines for licensing of small finance banks in the private sector".

"We are happy to have been selected in this august list as we are much smaller compared to the other selected organisations," Rupali Kalita, managing director of RGVN (North East) Microfinance Limited, told The Telegraph today.

The bank is headquartered in Guwahati.

The objectives of setting up of small finance banks will be to further financial inclusion by provision of savings vehicles and supply of credit to small business units; small and marginal farmers, micro and small industries and other unorganised sector entities, through high technology-low cost operations.

"We have been given 18 months to complete all the formalities required by the RBI. So, in effect the bank will be operational by March 2017," she said.

Kalita said her bank would provide all usual services provided by other banks. "The interest rates will be determined by the RBI," she said.

The small finance bank will be subject to all prudential norms and regulations of the RBI as applicable to existing commercial banks including requirement of maintenance of cash reserve ratio (CRR) and statutory liquidity ratio (SLR).

RGVN (North East) Microfinance had applied in February this year to the RBI for setting up a bank as they had a sound track record in the micro-finance business, according to Kalita.

It currently operates in five northeastern states - Assam, Meghalaya, Nagaland, Arunachal Pradesh and Sikkim. "We will shortly move into Tripura followed by Mizoram," she said.

A small bank shall primarily undertake basic banking activities like accepting deposits and lending to un-served and under-served sections, including small business units, small and marginal farmers, micro and small industries and unorganised sector entities. There will not be any restriction in the operations area of such banks. RGVN (North East) Microfinance became operational by taking over the micro-finance portfolio of credit and savings programme of Rashtriya Gramin Vikas Nidhi in October 2010. The company has overseas investors like Norwegian Microfinance Initiative and OikioCredit, the Netherlands, with additional infusion of capital from SIDBI and Dia Vikas Capital Private Limited.

The RBI had selected the applicants after reports by three different committees, backed by detailed case study for each applicant.