The Reserve Bank of India (RBI) on Friday said it has decided to give an in-principle approval to Centrum Financial Services Ltd to set up a small finance bank.
This has paved the way for Centrum to take over crisis hit Punjab and Maharashtra Cooperative (PMC) Bank.
Fintech firm BharatPe parent Resilient Innovations Pvt Ltd will be an equal partner with Centrum, both firms said in a statement.
Centrum, in partnership with fintech firm BharatPe, was among four groups which had made the submissions to the RBI for the acquisition of PMC, according to The Times of India last year. The RBI notification, however, did not mention BharatPe's name. The fintech firm had earlier applied for a non banking financial (NBFC) licence but failed to get it.
“We are delighted at the opportunity to build a high performing technology led Small Finance Bank serving the payment, investment and credit needs of the under-served. With Centrum as our partner, we are confident that we can create a world-class institution that provides a differentiated and superlative experience to retail customers as well as small businesses.” added Ashneer Grover, CEO and Co-Founder, BharatPe.
BharatPe, which was set up in 2018 by Ashneer Grover and Shashvat Nakrani, has been flush with cash this year. Earlier in February 2021, it got $108 million (around Rs 785.7 crore) in a Series D funding round led by existing investor Coatue Management. Last month, it raised Rs 50 crore ($7 million) from digital debt financing platform Northern Arc Capital. This was in addition to the debt funding it had raised from Trifecta Capital, Alteria Capital, InnoVen Capital, ICICI Bank and Axis Bank earlier this year.
Centrum, which was founded in 1997, is an integrated financial services group which provides services in several segments in the larger industry, including equity and debt, equity capital markets, mergers and acquisitions, corporate finance, primary and secondary debt placement and corporate debt restructuring, among others.
“We are delighted that a new banking license will be issued to a NBFC after a gap of nearly 6 years and would like to thank the RBI for the opportunity and confidence shown in us," Jaspal Bindra, Executive Chairman, Centrum Group said.