Which of the following is NOT a key player in the microfinance sector?

Correct option is A

Correct Answer: (a) IDBI
Explanation:
The microfinance sector in India comprises various institutions that provide financial services to low-income populations. Key players include Regional Rural Banks (RRBs), Small Finance Banks (SFBs), and Commercial Banks, all of which have significant involvement in microfinance activities.
Key Facts (Exam-Oriented):
· Regional Rural Banks (RRBs): Established to enhance rural credit and financial inclusion, RRBs play a crucial role in providing microfinance services to rural and semi-urban areas.
· Small Finance Banks (SFBs): Licensed to offer basic banking services, SFBs focus on serving unbanked and underbanked segments, including microfinance customers.
· Commercial Banks: Many commercial banks have dedicated microfinance divisions or collaborate with Microfinance Institutions (MFIs) to extend financial services to low-income groups.
Information Booster (Additional Insights):
· IDBI Bank: While IDBI Bank offers various financial products, its direct involvement in the microfinance sector is limited compared to RRBs, SFBs, and other commercial banks. IDBI's primary focus areas include corporate banking, retail banking, and MSME financing.
· Regional Rural Banks (RRBs): Established under the Regional Rural Banks Act, 1976, RRBs aim to develop the rural economy by providing credit and other facilities to small farmers, artisans, and agricultural laborers.
· Small Finance Banks (SFBs): Institutions like Jana Small Finance Bank and Ujjivan Small Finance Bank have transitioned from microfinance institutions to SFBs, continuing their focus on financial inclusion.
· Commercial Banks: Banks such as State Bank of India and HDFC Bank have substantial microfinance portfolios, either through direct lending or partnerships with MFIs.