Message for Customers – Transition to a Small Finance Bank (Scheduled Commercial Bank)
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:
- Open branches across any location in India
- Offer loans across any location in India
- Source Government and Institutional business
- More competitive rate of interest on home loans since Bank will become eligible for refinancing facility from government institutions
- Acceptability of Bank Guarantees and Fixed Deposits offered by the Bank in Government organizations
- Offer investments in mutual funds
- Offer products which allow benefits under the Income Tax Act e.g. super saver fixed deposits for senior citizens
- To be included in the category of Scheduled Commercial Banks
- Ability to expand at a faster pace
We thank you for your trust and patronage and look forward to your continued support.
Suveer Kumar GuptaMD & CEO