Two others have got the final licence to start operations," he said. The foreign investment limit of Equitas has come down from 93% to 47%.RBI had said that 50% of the loan portfolio should constitute loans of Rs 25 lakh, which most small finance banks comply with. Capital Local Area Bank started operations as Capital Small Finance Bank earlier this year.These institutions are transitioning their business model to become a small finance bank. Others including AU Financiers and Ujjivan Financial Services are awaiting their final licence to start the bank.Competition in the banking sector is set to intensify given the increase in the number of small finance banks and payments banks over the next few years. The expected rise in the number of private sector banks over the medium term could result in a decline in the share of public sector banks, which held more than 70% of the market as on March 31, 2016.

Source: Economic Times September 02, 2016 01:52 UTC