VFS Capital Pulls Small Finance Bank Licence Application: RBI

The Reserve Bank of India (RBI) has confirmed that VFS Capital Limited has withdrawn its application for a small finance bank (SFB) licence. The company had applied under the RBI’s guidelines for “on tap” licensing of small finance banks in the private sector. The RBI had earlier mentioned receiving the application in its January 1, 2025, press release.

VFS Capital Background

VFS Capital, a non-banking financial company-microfinance institution (NBFC-MFI), is based in Kolkata, West Bengal. It was incorporated in 1994 as a non-deposit-taking NBFC and started its microfinance operations in 2006. The company was registered as an NBFC-MFI with the RBI in September 2013.

Operations and Reach

The company provides microloans mainly to women in rural and semi-urban areas through a joint liability group (JLG) model, where each group consists of five members. It disburses all loans through digital channels. 

VFS Capital operates in 15 states, including West Bengal, Bihar, Odisha, Assam, Jharkhand, Madhya Pradesh, and Rajasthan, covering over 22,000 villages and serving nearly 5 lakh borrowers.

Shareholding and Management

As of December 2023, the company’s promoters, Chairman Ajit Kumar Maity and Managing Director & CEO Kuldip Maity, jointly held 92.74% of shares. IDFC First Bank Limited owned 7.03%. The company was earlier known as Village Financial Services Private Limited before becoming VFS Capital Limited.

VFS Capital Financial Details

For FY25, VFS Capital reported total income of ₹194 crore, compared to ₹178.85 crore in FY24. Net profit rose to ₹49.7 crore from ₹22.94 crore in the previous year. Assets under management (AUM) increased slightly to ₹948.34 crore from ₹942.3 crore in FY24. Gross non-performing assets (GNPA) stood at 2.14% in FY25, down from 2.20% a year earlier, while net NPAs remained nil.

According to the RBI’s 2019 framework, small finance banks require a minimum paid-up voting capital or net worth of ₹200 crore.

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Conclusion

VFS Capital’s withdrawal closes its application process for a small finance bank licence that had been under review for almost a year.

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