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Informist, Wednesday, Jan. 1, 2025

MUMBAI – The Reserve Bank of India on Wednesday said it has received an application from VFS Capital Ltd. for a small finance bank licence during the December quarter.

VFS Capital, formerly known as Village Financial Services, is the first microfinance company in the eastern region with non-bank finance company status registered by RBI. It offers loans through joint liability groups and provides loans to micro, small and medium enterprises, as per the company's website.

In the year ended Mar. 31, 2023, the Kolkata-based non-bank lender reported a net profit of INR 140.14 million on a total income of INR 1.69 billion. VFS Capital had 283 branches and a loan book of INR 8.04 billion as of March 2022, as per their website.

According to RBI guidelines, to transition to a small finance bank, a non-banking finance company or a microfinance institution must have a minimum net worth of INR 2 billion or should infuse additional paid-up capital within 18 months of the in-principle approval or as on the date of commencement of operations. They should also have a successful track record of running their businesses for at least five years.

Fino Payments Bank Ltd. applied to transition to a small finance bank in January 2024 and the application is still under consideration.  End

Reported by Kshipra Petkar

Edited by Saji George Titus

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