Message for Customers – Transition to a Small Finance Bank (Scheduled Commercial Bank)

Dear Customer,

On January 6, 2020 Shivalik Mercantile Co-operative Bank Ltd. received in principle approval from RBI to transition to a Small Finance Bank (SFB) (a Scheduled Commercial Bank). This has been possible due to your continuous patronage. As of March 31, 2019 thirty-one private commercial banks including ten SFBs were in operation.

The key objectives of setting up of SFBs were for furthering financial inclusion by:

  • provision of savings vehicles primarily to unserved and underserved sections of the population, and
  • supply of credit to small business units; small and marginal farmers; micro and small industries; and other unorganised sector entities, through high technology-low cost operations.

A major focus of the SFBs will be to provide loans of small ticket sizes with a focus on sectors eligible for classification as priority sector lending (PSL) by RBI.

The Bank envisages the following benefits to customers on transition to a SFB:

  1. Open branches across any location in India
  2. Offer loans across any location in India
  3. Source Government and Institutional business
  4. More competitive rate of interest on home loans since Bank will become eligible for refinancing facility from government institutions
  5. Acceptability of Bank Guarantees and Fixed Deposits offered by the Bank in Government organizations
  6. Offer investments in mutual funds
  7. Offer products which allow benefits under the Income Tax Act e.g. super saver fixed deposits for senior citizens
  8. To be included in the category of Scheduled Commercial Banks
  9. Ability to expand at a faster pace

We thank you for your trust and patronage and look forward to your continued support.

Suveer Kumar Gupta

MD & CEO

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