The Reserve Bank of India (RBI) on October 12 issued a small finance bank licence to the consortium of Centrum Financial Services Limited (Centrum), and Resilient Innovations Private Limited (BharatPe), Centrum said in an exchange filing.
The new entity will take over the assets and liabilities of Punjab and Maharashtra Co-operative Bank.
Centrum’s MSME and Micro Finance businesses will be merged into Unity Small Finance Bank.
Centrum said in a release that it is the first time ever the two partners are uniting equally to build a bank and the proposed business model is one of collaboration and open architecture.
Jaspal Bindra, Executive Chairman, Centrum Group, said, “We are delighted to receive the license 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.”
“I wish to thank the RBI for entrusting the Unity of BharatPe and Centrum with the SFB licence. We will work tirelessly and smartly to capture this opportunity and build India’s first truly Digital Bank ground up,” Ashneer Grover, Co-Founder and Managing Director, BharatPe, said in the release.
In a recent interaction with Moneycontrol, Grover had said that having an own small finance bank will help them lend more. Through its QR code and card machine, customers pay the merchant and BharatPe settles the transaction.
“We lend on the basis of the payments being done. We know how much business this merchant is doing through our system. But tomorrow, if behind every QR, what if we start offering him a bank account as well?” Grover said.
We will be able to witness more flows into the bank account and not just the flows on the QR, he added.
The RBI had given “in-principle” approval to Centrum Financial Services to set up a small finance bank, which paved the way for it to take over the crisis-ridden PMC Bank. The approval was in accordance with Centrum Financial Services’ offer in response to the expression of interest notification was published by PMC Bank.