NMI congratulates Utkarsh and RGVN
NMI congratulates Utkarsh Micro Finance Private Limited (“Utkarsh”) and RGVN (North East) Microfinance Limited (“RGVN”) for receiving in-principle approval from the Reserve Bank of India (“RBI”) to set up small finance banks, a new type of bank that the RBI hopes will broaden access to financial services at the lower end of the market.
The RBI received 72 applications for small finance banks. RGVN and Utkarsh were two of only ten institutions receiving the approval. The primarily objective of a small finance bank will be to undertake basic banking activities of acceptance of deposits and lending to unserved and underserved sections including small business units, small and marginal farmers, micro and small industries and unorganized sector entities.
The detailed selection process by RBI involved assessment of financial soundness, proposed business plan, fit and proper status based on due diligence reports received from the regulators, investigative agencies, banks, etc. An important factor was proposed reach into unbanked areas and underserved sections of the population. Njord Andrewes, Investment Director at NMI and RGVN Board member stated: “NMI is pleased to see the many years of hard work and dedication by the RGVN staff accumulate in receiving this license. This is a great moment for RGVN and the northeast of India, we are happy to be able to support this effort that has been a vision of organization for many years.” Knut Frigaard, Investment Director at NMI and Utkarsh Board member said on hearing the news: “We are very proud of the in-principle approval for Small Finance Banking granted by RBI to Utkarsh. This is a strong sign of faith and will allow Utkarsh to continue offering basic banking activities to the poor and underserved population in Northern India.” Norwegian Microfinance Initiative has supported Utkarsh since 2010.