Capital Small Finance Bank has been launched in Jalandhar and opened 10 branches on its inaugural day. The bank had been operating as Capital Local Area Bank since 2000 with 47 branches in five districts of Punjab.
The new bank is among the 10 entities that were given approval by the Reserve Bank of India, to set up small finance banks.
At the inauguration Nirmal Chand, regional director of the RBI, Chandigarh, said it was a historic day for the banking sector in India. He said India has regional rural banks, cooperative banks, and other small entities besides the giant network of public and private sector banks, but there is a void in the banking sector.
Chand noted that India has 7 branches per 100,000 population compared with 40 branches per 100,000 population in developed countries. He believes this gap can be bridged by small finance banks.
Sarvjit Singh Samra, managing director of Capital Small Finance Bank said the transition from a local area bank has removed the geographical barrier of expansion, as earlier lender’s operations were restricted to five districts in the state, and now the lender can expand in any part of the country. Samra however plans to grow in phases. In the current year the bank will consolidate it in Punjab by adding 29 branches, of which 10 were already opened on inaugural day.
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.