The Reserve Bank of India (RBI) on Tuesday issued a small finance bank (SFB) licence to the consortium of Centrum Financial Services Limited (Centrum), the small business lending arm of the Centrum Group, and Resilient Innovations Private Limited, parent of fintech lender BharatPe, the companies said in a statement.
The new SFB, has been incorporated as ‘Unity Small Finance Bank’. It is the first time ever that two partners are uniting equally to build a bank.
Centrum’s MSME and micro finance businesses shall be merged into Unity Small Finance Bank.
On the same day, private equity investor Tiger Global Management-backed BharatPe, which is a merchant payments and financial services provider, announced appointment of former chairman of State Bank of India (SBI), Rajnish Kumar to its board of directors.
"A new bank licence has been issued after a gap of nearly six years, and we thank the RBI for the confidence shown in the abilities of Centrum and BharatPe," a statement said.
In June this year, the banking regulator had given an in-principle approval to Centrum Financial Services Ltd to set up a small finance bank in a consortium with BharatPe.
BharatPe parent Resilient Innovations Pvt Ltd will be an equal joint venture partner with Centrum.
The RBI approval crosses the final hurdle for Centrum to take over crisis-hit Punjab and Maharashtra Cooperative (PMC) Bank.
Recently, in August, BharatPe raised $370 million in a primary and secondary mix, as a part of a Series E funding round led by new investor New York-based Tiger Global Management. The round valued BharatPe at $2.85 billion, giving a threefold growth in valuation in six months.
The new funds were raised to capitalise the distressed PMC Bank with its takeover.
After RBI’s approval in June, Ashneer Grover, co-founder and managing director of BharatPe told Mint that it will collectively infuse $250-300 million (or up to Rs 2,224 crore) in PMC Bank with Centrum, over the next two years.