VFS Capital, a microfinance lender with an outstanding portfolio of Rs 9.42 billion, has applied for a small finance bank license for the second time, following its initial rejection in 2015.

The Reserve Bank of India (RBI) confirmed that VFS Capital Limited submitted its application under the "on-tap" licensing guidelines for small finance banks in the private sector, issued on December 5, 2019.

Previously known as Village Financial Services, VFS was one of 72 applicants when the RBI first introduced the concept of differentiated banks a decade ago. Established in 1996-97, the Kolkata-based lender has focused on providing financial services to underserved borrowers at the bottom of the economic pyramid. Currently, VFS serves nearly half a million clients across more than 22,000 villages in 15 states.

(ET)