North East’s first small finance bank to start operations from June

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GUWAHATI: The North East Small Finance Bank (NESFB), which is the first small bank of North East India, is ready to start operations from the first week of June 2017.

The Rashtriya Gramin Vikas Nidhi Microfinance Limited-North East (RGVNMFL-NE), the promoter of North East Small Finance Bank, received the Small Finance Bank License from the Reserve Bank of India (RBI) on March 31, 2017. They received the inprinciple approval from RBI to set up a Small Finance Bank (SFB) in October 2015, making it the only non-banking financial company (NBFC) in the North Eastern region to be granted the inprinciple approval.

While SIDBI Venture Capital infused Rs 40 crore in RGVN (NE) MFL, PI Venture LLP put in Rs 20 crore. RNT Associates invested another Rs 40 crore. The Small Industries Development Bank of India (SIDBI) has also proposed an equity infusion of Rs 15 crore.

Prior to these, RGVN (NE) MFL already had investments from Dia Vikas, Oikocredit Netherlands, North Eastern Development Finance Corporation LtdBSE -1.93 % (NEDFi) and SIDBI.

Rupali Kalita, MD of NESFB said, “We are now testing the core banking software in which all the 4.07 lakh clients of RGVN (NE) MFL will be on-boarded. The entire exercise will be completed and the bank will be ready to launch by first week of June 2017.“

The RBI has approved 164 branch offices to be spread across nine states, including eight states from the North East and also West Bengal. Kalita said, “We will be opening all the 164 branches in a phase wise manner.These 164 branches also include interior areas of Bodoland, Karbi Anglong, Nagaland, Arunachal Pradesh, Sikkim, Manipur, Mizoram, Meghalaya and Tripura.“

The bank is planning to achieve a business of Rs 1,100 crore by March 2018 and scale it up to Rs 2,000 crore in two years.

Deep Joshi, Chairman of NESFB said that around 35% of the population of Northeast India is still unbanked.

Kalita added, “NESFB has planned for various Liability products including dailyweekly deposit accounts, fixed deposits, savings account, current account, etc. NESFB will continue its micro loans and build on its existing base, as it sees a huge ..

Source: Economic Times

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