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The Bank was incorporated as ‘Capital Local Area Bank Limited’ on May 31, 1999 at Phagwara district Kapurthala, Punjab, as a public limited company under the Companies Act, 1956, and was granted a certificate of incorporation by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh. The name of the Bank was subsequently changed to ‘Capital Small Finance Bank Limited’ pursuant to a shareholders’ resolution dated April 2, 2016, to reflect the change in status of the Bank from a local area bank to a small finance bank pursuant to the Reserve Bank of India approval dated March 4, 2016, and a fresh certificate of incorporation was granted by the Registrar of Companies, Punjab and Chandigarh at Chandigarh (RoC) on April 15, 2016. The Bank commenced its business pursuant to a certificate of commencement of business issued by the Registrar of Companies, Punjab, Himachal Pradesh and Chandigarh dated August 12, 1999.
Capital Small Finance Bank commenced operations as India’s first small finance bank in 2016 pursuant to RBI’s approval dated March 4, 2016. The bank offers a range of banking products on the asset and liability side, in all the states it operates in, i.e., Punjab, Haryana, Delhi, Rajasthan, Himachal Pradesh and Union Territory of Chandigarh. The bank has an experience of over two decades in the banking industry, having been incorporated in 1999. The bank is regulated by RBI and are one out of the two non-NBFC microfinance entities to receive the SFB license in 2015. The bank’s core strategy is to strengthen its retail focused banking franchise by enabling access to affordable credit in the states it operates in its well defined niche catering to middle income group segment with special emphasis on rural and semi-urban areas.
The bank focuses primarily on the middle-income customer segments i.e., customers with an average annual income of Rs 0.4 million to Rs 5 million in semi-urban and rural areas with 41.62% of its branches in rural areas, 34.68% branches in semi-urban areas and 23.70% of its branches in urban areas as on September 30, 2023. Since it focuses primarily on the middle-income customer segments, its full suite of products and services on the asset and liability side will provide it an opportunity to serve more customers in the middle-income segment that have limited or no access to formal banking channels, spread across rural and semiurban areas. The bank’s background as a local area bank helped it in understanding needs of its target customers but restricted its geographical outreach. Post conversion into a small finance bank, it has been able to expand its operations into new and contiguous geographies which has enabled it to widen its customer base and resulted in improved operational and business metrics. Over the years, the bank has expanded its operations strategically in the north Indian states of Punjab, Haryana, Rajasthan, Delhi, Himachal Pradesh and Union Territory, Chandigarh.
Business area of the bank
The bank focus on providing all banking product and services to the customers with emphasis on rural and semi-urban areas which allows it to penetrate deeper into the markets it caters.
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