Small finance banks have carved a niche in India’s banking sector. These banks target small businesses, low-income households, and rural areas. They play a significant role in enhancing financial inclusion in the country. Like all banks, small finance banks operate under the guidelines of the Reserve Bank of India, cementing user trust. Several investors also consider investing in these stocks for long-term gains.
These are small banks compared to other banks, but they have high potential. If you are considering investing, check out the small finance banks list to learn promising avenues for investment. These banks are gaining popularity thanks to the evolving digital landscape and customer demand. However, always do your research before investing and follow the market trends.
Small finance bank industry in India: A brief overview
Small finance banks represent a particular segment of banking under the purview of the RBI. They were launched to promote financial inclusion by enabling basic banking services such as loans to the unserved and underserved sections of society.
The customers include small and marginal farmers, small business units, micro and small industries, and unorganized entities. The expansion of the small finance banks list in India ensures access to bank credit and facilities to unbanked and underserved areas of India.
Top small finance bank stocks in India in 2025 by market capitalization
The small finance bank sector has witnessed significant growth, thanks to its strong connect with the economically weaker sections of society. The RBI, through its regulatory support, facilitated the establishment of SFBs to enhance banking services accessibility. The table below lists the top small finance banks in India in terms of market capitalization.
| Company Name | Last Price (₹) | % Change | 52-Week High (₹) | 52-Week Low (₹) | Market Cap (₹ crore | Sector |
| AU Small Finance Bank | 694.40 | -0.74 | 755.00 | 479.00 | 51,709.62 | Bank – Private |
| Ujjivan Small Finance Bank | 44.86 | 2.00 | 54.74 | 30.85 | 8,680.71 | Bank – Private |
| Equitas Small Finance Bank | 63.93 | -0.28 | 107.74 | 52.02 | 7,289.48 | Bank – Private |
| Jana Small Finance Bank | 509.00 | -1.94 | 760.85 | 364.00 | 5,352.65 | Bank – Private |
| Utkarsh Small Finance Bank | 24.00 | -0.46 | 55.20 | 21.18 | 2,643.86 | Bank – Private |
Data as of May 2025
Overview of the best small finance bank stocks in India
Small finance banks are a prominent segment in the Indian banking sector based on financial inclusion and the extension of services to low-income areas. Here is a list of the leading small finance banks in India.
1. AU Small Finance Bank
AU Small Finance Bank, established in 1996 as AU Financiers (India) Limited, has focused on servicing the under-banked and the unbanked regions in the last two decades. The bank has a full-scale product range. They include savings, current account services, ATMs, lockers, recurring deposits, fixed deposits, EMI calculators, interest calculators, and so on. During the financial year 2023, Au Small Finance Bank in India had a total income of 92.4 billion Indian rupees.
AU Small Finance Bank provides loans to individuals, such as personal loans, home loans, vehicle loans, loans against vehicles, and gold. Its insurance segment includes life, health, motor insurance, SME, and pocket insurance.
2. Ujjivan Small Finance Bank
Ujjivan Financial Services Limited (UFSL) began operations as an NBFC in 2005. It offers various financial services to the ‘economically active poor’ who do not receive enough support from financial institutions. Ujjivan provides savings accounts, current accounts, and depository accounts as well as other services.
The bank offers various loans, such as vehicle loans, home loans, gold loans, MSME loans, crop loans, and so on. It has branches in all 26 states and Union Territories.
3. Equitas Small Finance Bank Ltd
Equitas Small Finance Bank, operating as a wholly owned subsidiary of Equitas Holdings Ltd, was established in 2013 and obtained banking license in 2016. It provides services in microfinance, vehicle, housing, SME, and LAP segments. The bank is well-represented in 18 states and union territories with 964 banking outlets and 365 ATMs.
Tamil Nadu, Maharashtra, and Karnataka are major markets for the bank, constituting a dominant share of the advances and deposits. A diversified portfolio and strong regional presence show the bank’s willingness to cater to a wide spectrum of customers’ needs.
4. Jana Small Finance Bank Ltd
Jana Small Finance Bank, established in 2006, offers a wide range of banking and financial services. The bank has about 774 banking outlets in 22 states and 2 union territories, with a population of over 4.5 million active users. Specifically, 37% of its outlets are located in unbanked rural centers, pointing towards prioritizing financial inclusion.
The bank offers various loan products, including home loans, business loans, gold loans, and two-wheeler loans. These loans are all part of its Home 360 initiative, which aims to cater to customers’ various needs.
5. Utkarsh Small Finance Bank Limited
The Utkarsh Small Finance Bank Limited was incorporated in Varanasi and became a public limited company in April 2016. The bank is oriented on delivering financial services to customers in unbanked and underbanked territories.
The bank has several business segments: personal banking, business banking, and micro-banking. It provides various banking services.
Factors to consider before investing in small finance bank stocks in India
The banks included in the small finance banks list have established branches in cities and far-flung areas of the country to serve their clientele. The following factors must be considered if you plan to include small finance bank stocks in your portfolio.
• Market Reputation
Assess the bank’s reputation for compliance and customer satisfaction. A bank with a good reputation for compliance and high customer satisfaction can be considered a safe investment option.
• Competitive Landscape
Understand the difference between small finance banks and regular banks. Understand what they are good at and what they lack. Learning about these differences will help you assess the bank’s competitive position in the market.
• Customer-centric Approach
If you are interested in small finance bank stocks, you should consider customer orientation. This can result in high retention levels that will make the brands reputable, leading to an increase in revenues and profitability.
• Interest Rates
Monitor the interest rates provided by these banks since the rates influence their levels of profitability. Attempt to understand how the rates a bank offers influence the bank’s profit and your returns. The change in the interest rate could significantly impact their business.
• Financial Performance
Analyze profitability, margins, and asset quality in relation to risk management in determining the stability and growth potential of the enterprise. Estimate the level of financial stability and prospects of the SFB in question according to its profitability, quality of its loans, and capital adequacy.
Should you invest in small finance bank stocks?
The government of India and regulatory bodies have actively worked to enhance financial inclusion and offer suitable grounds for small finance banks to develop. Since SFBs are regulated by the RBI and they need to comply with the stringent provisions mandated by the apex bank, you can trust SFBs with your hard-earned money. Do your research about the business of the small finance bank you are considering for investment.
The best small finance banks list we have provided should help you select a stock for investment purposes.
Conclusion
Small finance banks are key players facilitating financial inclusion and economic empowerment in India. Although investing in small finance bank stocks might be risky, diversification and frequent monitoring may limit such risks and improve the possibility of long-term success.
By analyzing the top small finance banks list, investors can access the underserved and promising size of the market and support the larger objectives of financial inclusion and socio-economic development. Happy investing!
FAQs
Q. Which is the No. 1 small finance bank?
According to market capitalization, AU Small Finance Bank is rated the top small finance bank in India.Â
Q. How many small finance banks are listed?
As of March 2025, there are about 12 small finance banks in India. These small finance banks were formed as Public Limited Companies under the Companies Act 2013. However, only 11 are currently operating under RBI regulation.
Q. Which small finance bank is best and safest?
Most small finance banks are safe. They are a good option for your savings deposits as well as investments. Since SFBs are under the regulatory purview of the RBI and need to comply with the strict criteria set by the apex bank, you can depend on them with your hard-earned money.
Q. Which is the 12th small finance bank?
Ujjivan Financial Services Limited (UFSL) began operations as a non-banking financial company (NBFC) in 2005. Having received a license from the Reserve Bank of India (RBI), UFSL established Ujjivan Small Finance Bank and started its banking services on 1st February 2017.
