Small finance banks look to tap Odisha market for growth

Small finance banks (SFBs) have come up with firm plans for Odisha, a state with a large chunk of areas untouched by banking services.

These new-generation banks are betting on Odisha as the state has more than 4,200 panchayats with no access to banking services.

Suryodaya Small Finance Bank, headquartered in Navi Mumbai, is the first among small finance banks to start its services in the state by opening a branch here.

In Odisha, the new generation bank has approval for opening of another 16 new banking outlets in the next one year. In addition, it will be converting all its 37 micro-finance branches across Odisha into full-fledged banking branches in the next one year.

SFBs are offering niche banking services in India. Entities with a small finance bank license can provide basic banking service of accepting deposits and lending.

Jana Small Finance Bank is also planning to start its services in Odisha. Its operations in Odisha are likely to start between December and January. This bank has firmed up plans to expand, covering the entire state. Ujjivan Small Finance Bank also sees Odisha as a potential state along with Jana Small Finance Bank and Suryodaya.

“In Odisha, we believe that there are a lot of customers who are still unserved. Our focus will be on financial inclusion and we are planning to put our outlets where there are no bank facilities”, said an official of a small finance bank.

Recently, the Odisha government and officials of Reserve Bank of India's regional office in Bhubaneswar had met with the officials of payments banks and small finance banks, urging them to set up branches in the unbanked areas.

The state government had handed them a list of 677 unbanked panchayats to be covered in three years and invited them to set up branches there.

“The small finance banks are new generation banks. They must focus on expanding their reach to rural and unbanked areas”, said a bank official.