Top Small Finance Bank Stocks in India

(The stocks mentioned in the blog are as per Market Capitalization)

Small Finance Banks are financial institutions that mostly provide banking services to rural and semi-urban regions. They operate as public limited companies under the Companies Act, 2013. These banks offer basic banking services, including accepting deposits and providing loans, especially targeting underserved segments such as small businesses, micro and small industries, small and marginal farmers and unorganised sector entities.

According to reports, the total deposits of all small finance banks (SFBs) in India stood at approximately ₹3.77 lakh crore as of 31 December 2025. Deposit growth was more pronounced in the quarter ending in December last year. For the last financial year, which concluded on March 2025, total deposits for all SFBs (combined) stood at approximately ₹3.2 lakh crore. 

Small Finance Bank Industry in India - A Brief Overview

The Reserve Bank of India (RBI) established small finance banks as a specialised banking segment to strengthen the Indian economy and promote financial inclusion. The RBI issued guidelines for SFBs in November 2014, shortly after the Union Budget for 2014-15 was announced.

These banks focus on providing basic banking services to underserved and underprivileged sections of society. They often establish branches in remote areas to enhance financial literacy, encourage savings, and facilitate account opening.

SFBs operate under the regulatory framework of several laws and regulations, including the Banking Regulation Act, 1949, the Reserve Bank of India Act, 1934, the Foreign Exchange Management Act, 1999, and others. 

In FY25, SFBs recorded advanced growth of 18-20%, with a Return on Total Assets (ROTA) of about 1.0-1.6%. They also achieved a robust CAGR (compound annual growth rate) of 28% between FY22 and FY25, which is higher than the industry average. Their credit and deposits posted CAGRs of approximately 25% and 34%, respectively, for FY25. 

Top Small Finance Bank Stocks in India in 2026 as per Market Capitalisation

The following table outlines the list of top small finance banks in India, sorted as per market capitalisation:

*Our stock selection criteria for top stocks based on Market Capitalisation are mentioned at the bottom of this blog.

Overview of Best Small Finance Bank Stocks in India as per Market Capitalisation

Below, you will find a comprehensive overview of the small finance bank stocks ranked by analyst ratings and market capitalisation. 

1) AU Small Finance Bank

Established in 1996 as AU Financiers (India) Limited, AU Small Finance Bank has focused on serving underbanked and unbanked areas over the past 2 decades. The bank offers a comprehensive range of products, including savings and current accounts, ATMs, lockers, recurring deposits, fixed deposits, EMI calculators, and interest calculators. 

AU Small Finance Bank offers personal loans, home loans, vehicle loans, loans against vehicles and gold loans. Its insurance segment covers life insurance, health insurance, motor insurance, SME insurance, pocket insurance and more.

The AU Small Finance Bank also provides services such as net banking, video banking, WhatsApp banking, missed call banking, and mobile banking. Presently, it boasts a network of over 2,400-2,600+ touchpoints across India.

2) Ujjivan Small Finance Bank

Started operating as an NBFC in 2005, Ujjivan Financial Services Limited (UFSL) provides a wide range of financial services to the ‘economically active poor’ who lack sufficient support from financial institutions.

The bank operates across 4 segments: personal banking, corporate banking, business banking and rural banking. It offers savings, current, and deposit accounts, along with services such as third-party insurance product distribution, ATM/debit cards, and Aadhaar enrollment. 

Ujjivan Small Finance Bank offers a range of loan products, including vehicle loans, home loans, gold loans, MSME loans, crop loans, Kisan Suvidha Loans, and more. Furthermore, it has around 613 ATMs, including ACR (automated cash recycler) machines, two dedicated 24/7 phone banking units in Pune and Bangalore, a presence in 26 states and Union Territories, and a network of around 766 branches as of late 2025.

3) Equitas Small Finance Bank

Equitas Small Finance Bank Limited, originally operated as V.A.P Finance Private Limited, was incorporated on June 21st, 1993. Later, in September 2015, it became a public limited company and changed its name to Equitas Finance Limited.

Headquartered in Chennai, Equitas Small Finance Bank offers a wide range of banking services to financially underserved segments across India. The bank operates in two segments: personal and business. Equitas Small Finance Bank specialises in home and car loans.

The bank offers a variety of asset products tailored to different customer profiles. These include Small Business Loans (SBLs) such as loans against property, housing loans, and agriculture loans for micro-entrepreneurs. Besides providing loans, it also offers healthcare, education, skill-training centres, and job fairs, particularly in South India.

4) Jana Small Finance Bank

Jana Small Finance Bank, headquartered in Bangalore, started operations in 2018 and operates 771 banking outlets across 22 states and two union territories, including 278 outlets in unbanked rural centres.

The bank serves about 12 million customers, of whom 4.87 million are active. Its offerings include savings accounts, current accounts, deposits, loans, cards, online banking, payments, insurance, and safe deposit locker facilities. 

The bank’s loan services cover various categories, such as home, group, business, agricultural, gold, and two-wheeler loans. Online banking services encompass mobile and Internet banking, while savings accounts come in various types, such as premium, silver premium, and DIGIGEN.

5) Utkarsh Small Finance Bank Limited

Headquartered in Varanasi, Utkarsh Small Finance Bank Limited became a Public Limited Company on April 30, 2016. Engaged in offering banking and financial services, the bank primarily serves customers in unbanked and underbanked areas.

The bank is categorised into segments: personal banking, business banking, and micro-banking. It provides an array of banking products, including savings accounts, recurring and fixed deposits, insurance and investments, loans, digital products, and more.

Utkarsh Small Finance Bank Limited also offers various banking methods, including ATM, internet banking, mobile banking, and UPI. Furthermore, the bank offers various loan products, including loans against property, gold loans, home loans, etc.  It also focuses on empowering women by offering financial literacy programs and loans tailored for women entrepreneurs. 

Factors to Consider Before Investing in Small Finance Bank Stocks in India

Before picking small finance bank stocks for your portfolio, keep these key points in mind:

• Market Reputation

Assess how the bank is perceived regarding regulatory compliance and customer satisfaction. A bank with a strong reputation for compliance with rules and customer satisfaction is generally considered a safer investment option.

• Competitive Landscape

Compare small finance banks to regular banks and post offices. See what advantages and disadvantages they have. Understanding these differences helps you assess the bank's competitive position in the market.

• Customer-centric Approach 

When looking at small finance bank stocks, it is important to note their customer-focused approach. Check whether they meet customers' needs and prioritise customer satisfaction. This can result in higher customer retention rates, stronger brand reputations, and, ultimately, potential growth in revenues and profitability. 

• Interest Rates

Try to understand how the rates a bank offers affect its profitability and your profits. Changes in interest rates can have a significant impact, potentially affecting the stock prices.

• Financial Performance

Examine the bank's profitability, along with net interest margins, asset quality, and risk management. This helps you understand if the bank is stable and has room to grow financially.

Should You Invest in Small Finance Bank Stocks?

Small finance banks offer growth opportunities but also entail certain risks. Economic cycles can significantly impact these banks, with downturns leading to decreased consumer spending and borrowing, thereby affecting their profitability. Moreover, the risk of loan defaults poses a considerable threat, especially during economic downturns when more borrowers may struggle to repay their loans. 

Small finance banks are also vulnerable to interest rate fluctuations, which can impact their profitability. Therefore, before buying small finance bank stocks, you must conduct thorough research and carefully consider your risk appetite. Additionally, you can seek guidance from a financial expert who can help you choose the stock tailored to your needs.

The Bottom Line 

Investing in small finance bank shares in India can be rewarding, given their focus on financial inclusion. These banks make strong efforts to assist underserved communities and drive economic growth through priority lending. But remember, these companies' performance is also prone to market risk; hence, considering investment factors before putting money is essential.