Private-sector lender RBL Bank Ltd has acquired the 39.52% stake it doesn’t already own in Mumbai-based financial products distribution unit Swadhaar FinServe Pvt. Ltd.
The bank didn’t disclose the value of the all-cash deal citing confidentiality reasons.
The acquisition is in line with the bank’s policy of strengthening its market position in the inclusive finance segment, it said in a stock-exchange disclosure.
RBL Bank bought the stake from investors including Accion, a global non-profit company focussed on fintech and microfinance sectors.
Harjeet Toor, head of retail, inclusion and rural business at RBL Bank, said the bank sees Swadhaar as a vehicle catering to underserved households and small businesses.
“In the future, we will also be looking to leverage Swadhaar’s growing branch network to offer other relevant products to customers in semi-urban and rural markets,” said Toor.
RBL Bank had initially bought a 30% stake in Swadhaar in September 2016.
Swadhaar works as a last-mile distributor of financial services and products, particularly loans and savings products, to low-income households and microenterprises across India. It has 331 branches across the country.
Swadhaar FinServe started operations in 2008 as a non-banking financial company, taking over the micro-credit portfolio of Swadhaar FinAccess and subsequently converting to an NBFC-microfinance institution in 2010.
In 2015, Swadhaar FinServe applied to the Reserve Bank of India to surrender its NBFC licence and operate as a business correspondent. This was approved in January 2016.
The company’s revenue rose to Rs 106.96 crore in 2017-18 from Rs 47.54 crore the previous year.
RBL Bank is one of several banks that are increasingly looking at acquiring companies in the financial services segment to increase their bandwidth.
In July 2017, Axis Bank bought digital payments platform FreeCharge from e-commerce firm Snapdeal for about Rs 385 crore ($60 million).