Three-year-old BharatPe and Centrum gets RBI nod to set up a small finance bank

Four months after giving an in-principle nod to Centrum Financial Services and BharatPe to establish a small finance bank, the RBI on Tuesday granted a licence to the consortium that had expressed interest to take over the crisis-impacted Punjab and Maharashtra Cooperative (PMC) Bank.

In June, the Reserve Bank had given the in-principle approval for the SFB licence to the consortium against its interest to take over the PMC Bank, a city-based cooperative lender under restrictions for more than two years after a massive over Rs 7,000-crore fraud at the lender.

In a joint statement, Centrum and BharatPe, which are uniting equally to build the SFB, said the RBI's final approval has been received earlier in the day, and this is the first time in six years that the central bank has given a banking licence.
Earlier in the day, BharatPe announced that former SBI veteran Rajnish Kumar is joining its board as the chairman and will be playing the role of a mentor for the fintech's team on the path to forming an SFB.
The new SFB has been incorporated as "Unity Small Finance Bank" and the business model is "one of collaboration and open architecture", uniting all its stakeholders to deliver a seamless digital experience, the statement said.
However, details about how the amalgamation with Punjab and Maharashtra Cooperative (PMC) Bank will happen from an operational perspective were not known immediately.
The statement said Centrum's MSME and microfinance businesses shall be merged into Unity Small Finance Bank.
"We are delighted to receive the licence and excited to partner with BharatPe to create this new age bank, with a strong team. We aspire to be India's first Digital Bank," Centrum Group's chairman Jaspal Bindra said.
"We will work tirelessly and smartly to capture this opportunity and build India's first truly Digital Bank ground up," Ashneer Grover, the co-Founder and managing director of BharatPe, said.

While granting the in-principle nod on June 18, the RBI had said that the approval has been accorded in specific pursuance to the Centrum Financial Services' February 1 offer expressing interest to take over PMC Bank.

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