Reserve Bank of India (RBI) has granted licence to the Centrum Financial Services and BharatPe consortium to set up a small finance bank (SFB), four months after they had showed interest in taking over the crisis-ridden Punjab and Maharashtra Cooperative Bank (PMC).
The central bank has given the consortium a licence after earlier granting it an in-principle approval for setting up an SFB in June this year.
PMC Bank, a Mumbai-based cooperative lender had been under restrictions for more than two years in the aftermath of a Rs 7,000-crore fraud.
The consortium said in a joint statement confirmed that they have received RBI’s final approval and that it is for the first time in six years that RBI has granted a banking licence to any entity.
Earlier on Tuesday, BharatPe had announced that former State Bank of India (SBI) head Rajnish Kumar is joining its board as chairman and will act as a mentor while overseeing the fintech company’s efforts of setting up a 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.
Details regarding amalgamation of PMC with the new SFB are not known as of now.
The statement said Centrum’s micro, small and medium as well as 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, co-founder and managing director of BharatPe, said.