Best Small Finance Banks in India

Small finance banks are an important part of India's banking system, introduced by the Reserve Bank of India (RBI) so that small businesses, farmers, shopkeepers and first-time savers could get full banking services close to home. Since the first ones opened in 2016, these banks have built nationwide networks of branches and digital channels, offering savings accounts, deposits, loans and cards to customers from metro cities to rural India.

As the category grows, the list of small finance banks in India keeps evolving. New banks receive licences, some join hands through mergers, and the leading ones progress towards becoming universal banks. This page gives you the current list as per RBI records, explains how it has changed over the years, and points you to the official sources where the latest list is always available.

What is a small finance bank?

A small finance bank (SFB) is a bank licensed by the RBI under the Banking Regulation Act to provide basic banking services, with a focus on customers and businesses that larger banks have historically under-served. It accepts deposits, lends and offers digital banking, and its deposits are covered by deposit insurance in the same way as deposits at other scheduled banks. If you want the background, the concept and purpose of small finance banks are covered in this introduction to small finance banks, and the practical difference between a commercial bank and a small finance bank is explained separately.

How the list of small finance banks has changed

The SFB category has a short but eventful history. Knowing the main milestones helps you understand why lists published at different times show a different number of banks.

• 2015: the first licences. The RBI announced in-principle approvals for the first batch of ten applicants in September 2015. Most of them were microfinance institutions, one was a local area bank and one was a non-banking finance company (NBFC) with a vehicle and small business loan book.
• 2016 to 2018: the first banks open. Capital Small Finance Bank, which converted from a local area bank, was the first to begin operations in April 2016. The rest of the first batch started between September 2016 and March 2018.
• 2019 onwards: on-tap licensing. The RBI moved to an "on tap" licensing window, which allows eligible entities to apply at any time. Under this route, an urban co-operative bank converted into an SFB for the first time in April 2021, and a newly promoted bank began operations in November 2021.
• 2024: the first merger between two SFBs. Fincare Small Finance Bank merged into AU Small Finance Bank with effect from 1 April 2024, after RBI approval. Fincare no longer exists as a separate bank; its customers and branches are now part of AU Small Finance Bank.
• 2024 to 2025: a fintech merges with an SFB. The lending fintech slice merged with North East Small Finance Bank in October 2024, and the merged bank was renamed slice Small Finance Bank in 2025. The bank continues to hold the original SFB licence.
• 2025: the first step towards universal banking. In August 2025, AU Small Finance Bank became the first SFB to receive in-principle approval from the RBI to transition into a universal bank. As of September 2026, the transition is in progress and AU continues to operate as a small finance bank.
• 2025 to 2026: more movement. A payments bank has received in-principle approval to convert into an SFB, and other SFBs have also expressed interest in becoming universal banks, which shows how the category has matured. None of these developments had altered the RBI's list as of September 2026.

List of small finance banks in India

List reflects RBI records as of September 2026. For the latest list, refer to the RBI website.

A few notes on reading the table:

• "Year operations began as SFB" is the date the bank opened for business under its SFB licence, not the year its parent company was founded.
• "Erstwhile entity type" describes what the organisation was immediately before it became a bank. NBFC-MFI stands for a non-banking financial company that mainly gave microfinance loans.
• Fincare Small Finance Bank, which you may still see on older lists, merged into AU Small Finance Bank with effect from 1 April 2024. North East Small Finance Bank has not closed; it now operates under the name slice Small Finance Bank.

How to choose a small finance bank

All licensed SFBs work under the same RBI rules, so the choice comes down to what suits you. Here are practical points to weigh, without relying on rankings.

• Branch and ATM access. Check whether the bank has a branch near your home or workplace, and whether you can use other banks' ATMs without difficulty.
• Digital banking. Look at the mobile app and internet banking. Can you open an account, book a deposit, pay bills and raise a service request without visiting a branch?
• Products you actually need. Every SFB offers accounts, deposits and loans; many also offer credit cards, locker facilities, wealth products and business banking, so pick the one whose range matches your needs. Whether SFBs can issue credit cards is answered in this note on credit cards from small finance banks.
• Listing and disclosure. A bank listed on the stock exchanges publishes quarterly results and other disclosures, which makes it easier to follow its health.
• Track record and service. How long has the bank operated, and how convenient are account opening, deposit booking and customer support?

If your main goal is parking savings in fixed or recurring deposits, this guide on whether small finance banks are good for investments walks through the safety and return considerations in more detail.

How to find the official list of small finance banks

If you want to confirm the latest list yourself, these sources take only a couple of minutes.

• The RBI website. The RBI publishes a list of banks in India, grouped by category, and small finance banks appear under their own heading. This is the single most reliable reference.
• The bank's legal name. Every SFB has "Small Finance Bank Limited" in its legal name, which you will see on account opening forms, cheque books and passbooks.
• Deposit insurance. Deposits in all scheduled banks, including SFBs, are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) up to the prescribed limit per depositor per bank, the same cover that applies to every other commercial bank in India.
• The bank's own website. Use it to locate branches and IFSC codes, so you always have the current details after a merger or name change.

Conclusion

The list of small finance banks in India stood at eleven banks as per RBI records in September 2026, following the Fincare merger into AU Small Finance Bank and the renaming of one bank after its merger with a fintech. The category continues to grow in reach and ambition: a payments bank is converting into an SFB, and the first SFB-to-universal-bank transition is under way.

Whenever you read a list like this one, check the "last reviewed" date and refer to the RBI website for the very latest position. If you are considering opening an account with AU Small Finance Bank, you can visit a branch or download the AU 0101 app to see the accounts, deposits and services available to you.

Frequently Asked Questions (FAQs)

How many small finance banks are there in India?

As per RBI records in September 2026, there are eleven small finance banks operating in India. The number changes when the RBI grants new licences, when banks merge, or when an SFB transitions into a universal bank, so always confirm the current count on the RBI website.

Is Fincare Small Finance Bank still a small finance bank?

No. Fincare Small Finance Bank merged into AU Small Finance Bank with effect from 1 April 2024, after approval from the RBI. Former Fincare customers, branches and accounts are now serviced by AU Small Finance Bank, and Fincare no longer appears on the RBI's list of banks.

Which was the first small finance bank in India?

Capital Small Finance Bank, headquartered in Jalandhar, was the first to begin operations as a small finance bank, on 24 April 2016. It converted from a local area bank. The other banks from the first batch of licences began operations between September 2016 and March 2018.

What happened to North East Small Finance Bank?

North East Small Finance Bank merged with the fintech lender slice in October 2024, and the merged bank was renamed slice Small Finance Bank in 2025. It continues to operate under the original small finance bank licence, so it remains on the RBI's list of small finance banks under its new name.

Are deposits in small finance banks safe?

Yes. Small finance banks are scheduled banks licensed and supervised by the RBI, and they follow the same capital, liquidity and customer-protection norms as other commercial banks. Their deposits are insured by DICGC up to the prescribed limit per depositor per bank, exactly the same cover that applies to deposits in any other commercial bank.

Can a small finance bank become a universal bank?

Yes. The RBI allows an eligible small finance bank with a satisfactory track record to apply for transition into a universal bank. AU Small Finance Bank received in-principle approval for this transition in August 2025, the first SFB to do so. The RBI reviews each application on its merits.

Are small finance banks listed on the stock exchange?

Most small finance banks in India are listed on the NSE and BSE, as listing within a set period after starting operations is part of the licensing framework, and the newer SFBs are expected to follow the same path in due course. Listed banks publish quarterly results and disclosures that customers can review.