India’s Small Finance Banks have emerged as one of the most dynamic and socially impactful segments of the country’s banking sector since the first batch of licences was issued by the Reserve Bank of India in 2015. Small Finance Banks were established with a mandate to provide basic banking services to underserved and unserved segments including small business units, small and marginal farmers, micro and small industries, and the unorganised sector. As of 2026, there are 12 SFBs operating in India. AU Small Finance Bank leads the pack with total assets of Rs 1,13,020 crore and deposits of Rs 91,416 crore. Equitas Small Finance Bank is the second largest by total business while Jana Small Finance Bank and ESAF have received universal bank conversion approvals. The sector is growing at over 25 percent annually in deposits and advances, significantly outpacing the broader banking sector. Let us have a look at the top 10 small finance banks in India for the year 2026.
1. AU Small Finance Bank
AU Small Finance Bank, founded in the year 1996 as Au Financiers India Ltd. and converted into a small finance bank in the year 2017, is headquartered in Jaipur, Rajasthan, and is the largest small finance bank in India with total assets of Rs 1,13,020 crore and deposits of Rs 91,416 crore. The bank transitioned from a vehicle and MSME finance company and has built a highly diversified retail banking franchise across North and West India. AU SFB received the Reserve Bank of India’s in-principle approval for conversion to a universal bank in January 2025 — a significant milestone that will unlock its next phase of growth and capital market access.
AU Small Finance Bank serves salaried professionals, self-employed individuals, MSMEs, and retail depositors across India primarily in North and West India with its comprehensive banking products including savings accounts, fixed deposits, vehicle loans, home loans, and business loans, and is on track to become a full universal commercial bank that will compete directly with mid-size private sector banks.
2. Equitas Small Finance Bank
Equitas Small Finance Bank, established in the year 2016 and headquartered in Chennai, is the second largest small finance bank in India by total business and one of the most respected SFBs in the southern Indian market. The bank has grown from its microfinance origins to build a comprehensive retail and MSME banking franchise with particular strength in vehicle finance, housing finance, and microfinance. Equitas SFB’s diversified loan portfolio and strong asset quality management have earned it consistent ratings of 4 to 5 stars from financial analysts tracking the SFB sector.
Equitas SFB serves microfinance borrowers, small vehicle owners, home loan seekers, and MSME operators primarily in Tamil Nadu and other southern Indian states with its comprehensive banking services, and is valued for its customer-centric approach, strong community banking model, and the demonstrated social impact of its financial inclusion-focused operations.
3. Ujjivan Small Finance Bank
Ujjivan Small Finance Bank, established in the year 2017 and headquartered in Bengaluru, is one of India’s most mission-driven small finance banks with a history rooted in Ujjivan Financial Services’ two decades of microfinance operations serving India’s low-income urban and semi-urban households. The bank has built a strong and loyal customer base of women microfinance borrowers and has expanded into secured home loans, personal loans, MSME finance, and retail deposits. Ujjivan SFB’s geographic reach across 24 states and its technology-first banking approach make it one of the most operationally modern SFBs in India.
Ujjivan SFB serves women microfinance borrowers, low-income households, small business operators, and retail depositors across India with its inclusive banking services, and is the most nationally distributed small finance bank in India with a presence across 24 states that reflects its origins in microfinance lending to urban and semi-urban women borrowers.
4. Jana Small Finance Bank
Jana Small Finance Bank, headquartered in Bengaluru and converted from Jana Urban Foundation’s microfinance operations, is one of India’s rapidly growing small finance banks with a strong focus on microfinance, housing, MSME, and retail banking. Jana SFB received RBI in-principle approval for conversion to a universal bank in January 2025 alongside AU SFB, making it one of the two SFBs closest to achieving full commercial bank status. The bank has been scaling up its retail fixed deposit franchise aggressively to build a stable, low-cost funding base for its growing loan book.
Jana Small Finance Bank serves microfinance customers, housing loan borrowers, and MSME operators across India with its banking products, and its imminent conversion to a universal bank status will significantly broaden its product range, capital market access, and ability to serve a wider customer segment including large corporate clients.
5. ESAF Small Finance Bank
ESAF Small Finance Bank, established in the year 2017 and headquartered in Thrissur, Kerala, is one of the most mission-aligned small finance banks in India with roots in Evangelical Social Action Forum’s microfinance and community development work serving marginalised communities across Kerala, Tamil Nadu, and other southern states. The bank has a strong microfinance book, particularly among women borrowers in rural and semi-urban areas, and received in-principle approval for universal bank conversion in January 2025. ESAF’s Kerala-headquartered operations have deep community relationships built over decades of social sector work.
ESAF Small Finance Bank serves women microfinance borrowers, rural households, and small business operators primarily in Kerala and Tamil Nadu with its banking services, and its social mission heritage, community trust, and in-principle universal bank conversion approval position it for significant expansion beyond its traditional southern India microfinance stronghold.
6. Suryoday Small Finance Bank
Suryoday Small Finance Bank, established in the year 2017 and headquartered in Navi Mumbai, is a publicly listed small finance bank that has built a strong retail banking franchise with a particular focus on the affordable housing loan, microfinance, and MSME finance segments. The bank has been growing its retail fixed deposit base rapidly and expanding its physical branch and business correspondent network across Maharashtra and other states. Suryoday’s listing on Indian stock exchanges provides transparency and capital market access that supports its growth ambitions.
Suryoday SFB serves microfinance borrowers, affordable housing loan seekers, and MSME operators primarily in Maharashtra and western India with its banking products, and is building a growing retail banking franchise that leverages its microfinance customer relationships to cross-sell housing loans, insurance, and savings products.
7. Utkarsh Small Finance Bank
Utkarsh Small Finance Bank, established in the year 2017 and headquartered in Varanasi, Uttar Pradesh, is one of India’s most geographically significant small finance banks given its focus on the underserved Hindi heartland states of Uttar Pradesh, Bihar, Madhya Pradesh, and Uttarakhand. The bank serves predominantly rural and semi-urban customers in the most densely populated and financially underserved belt of India, making its financial inclusion impact disproportionately significant. Utkarsh SFB is listed on Indian stock exchanges and has been growing its deposit franchise and diversifying its loan book beyond its microfinance origins.
Utkarsh Small Finance Bank serves rural and semi-urban microfinance borrowers, small farmers, and MSME operators primarily in North India’s Hindi heartland states with its banking services, and its geographic focus on the most financially underserved regions of India gives it a distinctive social impact profile and a large addressable customer base for future expansion.
8. Unity Small Finance Bank
Unity Small Finance Bank, incorporated in the year 2021 and based in Mumbai, is the newest and most uniquely structured small finance bank in India, created as part of the resolution of the Punjab and Maharashtra Co-operative Bank crisis. The bank is a joint venture between Centrum Financial Services and BharatPe and represents an innovative convergence of fintech and traditional banking. Unity SFB is focused on building a technology-first, digitally native banking platform that serves SMEs and retail customers with innovative digital financial products.
Unity Small Finance Bank serves SME businesses and retail banking customers with its technology-first banking approach, and its BharatPe connection gives it unique access to the merchant ecosystem and payment data that can be leveraged for underwriting and customer acquisition in ways that traditional banking institutions cannot easily replicate.
9. Shivalik Small Finance Bank
Shivalik Small Finance Bank, formerly known as Shivalik Mercantile Co-operative Bank and converted to an SFB in April 2021, is headquartered in Saharanpur, Uttar Pradesh and is the first co-operative bank in India to be successfully converted to a small finance bank. The bank serves the western Uttar Pradesh market with a focus on MSME lending, retail deposits, and agri finance with deep community relationships built over decades of cooperative banking operations in the region.
Shivalik Small Finance Bank serves the MSME, agricultural, and retail banking needs of western Uttar Pradesh and adjacent markets with its community banking approach, and as the first successful cooperative-to-SFB conversion in India, it serves as a model for other well-performing cooperative banks seeking to upgrade to a more capable banking licence.
10. North East Small Finance Bank
North East Small Finance Bank, established in the year 2017 and headquartered in Guwahati, Assam, is the only small finance bank in India specifically focused on the northeastern region — a geographically and economically unique market that has been historically underserved by mainstream commercial banks. The bank serves rural and semi-urban communities across Assam, Meghalaya, and other northeastern states with microfinance, agricultural loans, and retail banking services that address the specific needs of the region’s diverse communities.
North East Small Finance Bank serves the financially underserved communities of India’s northeastern region with microfinance, agricultural finance, and retail banking services, and occupies a strategically important and virtually uncontested position as the dedicated SFB for a region whose 46 million population has historically had severely limited access to formal banking and credit services.
Frequently Asked Questions (FAQs)
Q: What is a Small Finance Bank and how is it different from a regular bank?
A: A Small Finance Bank is a type of niche bank licensed by the RBI specifically to provide basic banking services to underserved segments including microfinance borrowers, small businesses, marginal farmers, and low-income households. While SFBs offer the same products as commercial banks including deposits and loans, they have a mandate to deploy at least 75 percent of their adjusted net bank credit to priority sector lending. SFBs also have restrictions on maximum loan size and must maintain a higher minimum capital adequacy ratio than commercial banks.
Q: Which is the largest small finance bank in India in 2026?
A: AU Small Finance Bank is the largest SFB in India with total assets of Rs 1,13,020 crore and deposits of Rs 91,416 crore. The second largest by total business is Equitas Small Finance Bank. AU SFB and Jana Small Finance Bank have both received RBI in-principle approval for conversion to universal banks in January 2025, making them the most likely candidates to graduate from SFB status in the near future.
Q: Which SFBs have received universal bank conversion approval?
A: The RBI granted in-principle approval for universal bank conversion to AU Small Finance Bank, Jana Small Finance Bank, and ESAF Small Finance Bank in January 2025. These three banks are now in the process of meeting the conditions set by RBI for full universal bank licences. Upon conversion, they will no longer have the restrictions of the SFB licence and will be able to compete as full-service commercial banks across all customer segments and product categories.
Q: What interest rates do small finance banks offer on deposits?
A: Small Finance Banks typically offer significantly higher interest rates on fixed deposits and savings accounts compared to large commercial banks — often 0.5 to 1.5 percentage points higher — to attract retail deposits and build their funding base. As of 2026, most SFBs offer fixed deposit rates of 8.5 to 9.5 percent per annum for 1 to 3 year tenures. These higher rates are backed by the Deposit Insurance and Credit Guarantee Corporation coverage of up to Rs 5 lakh per depositor, making SFB deposits safe for retail investors.
Q: Are deposits in small finance banks safe?
A: Deposits in RBI-licensed Small Finance Banks are covered by Deposit Insurance under DICGC up to Rs 5 lakh per depositor per bank, the same protection applicable to commercial bank deposits. SFBs are regulated by RBI under the same prudential framework as commercial banks with mandatory capital adequacy, liquidity, and asset quality reporting requirements. While SFBs carry slightly higher risk than large established banks due to their concentration in microfinance and underserved segments, their RBI regulation and DICGC deposit insurance make them safe for retail depositors investing up to Rs 5 lakh per bank.