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With 10 branches, India’s first small finance bank launched operations in Punjab

With 10 branches India s first small finance bank launched operations in Punjab pardesi news 1463064549

Capital Local Area Bank is India’s first small finance bank, which has recently commenced operations from Punjab. The bank seeks to expand but in phases.

The Capital Small Finance Bank is set to become India’s first small area finance bank (SFB) by recently flagging-off its operations. The Jalandhar-based bank has kicked off operations in April with its ten branches.

The bank was earlier operating as Capital Local Area Bank (CLAB), as local area bank since 2000 with over 45 branches in five districts of Punjab.  

According to Mr. Sarvjit Singh Samra, managing director of Capital Small Finance Bank, the bank's transition from a local area bank into a small finance bank is a boon to its operations, as it will remove the geographical barrier of expansion and will provide the necessary impetus for growth and more client engagements. Samra however plans to grow in phases, “we will focus on Punjab in the first year. In the second year, we plan to expand to Haryana and Rajasthan and thereafter, to other northern states such as Uttarakhand, Himachal Pradesh, and Delhi”.  

This small finance bank will primarily undertake basic banking activities of acceptance of deposits and lending to sections requiring financial support such as the small business units, small and marginal farmers, micro and small industries and unorganised sector entities.

The bank’s business is projected to increase from Rs.3,000 crore as on March 2016 to Rs.12,000 crore and the branch network to 216 by March 2021. Also being the only bank with 7-day operations in rural areas, Capital Small Finance Bank expects to achieve its targets as planned. It is among the 10 entities that were given the in-principle approval by the Reserve Bank of India (RBI) to set up small finance banks. 

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Patrick Callahan

Pardesi News Reporter

Pardesi News Reporter

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