The Reserve Bank of India has granted a Small Finance Bank (SFB) licence to Centrum Financial Services Ltd, the Centrum Group’s small business lending arm, and Resilient Innovations Pvt Ltd (BharatPe), one of India’s fastest-growing fintech companies. The new SFB has been named ‘Unity Small Finance Bank.’
Centrum Group’s executive chairman, Jaspal Bindra, stated: “After nearly six years, a new bank licence has been issued. Centrum and BharatPe are now well on their way to establishing India’s first digital small finance bank, and we thank the RBI for its faith in their abilities.”
In June 2021, the RBI granted NBFC Centrum Financial Services ‘in-principle’ approval to establish a small finance bank, which will take over the troubled Punjab Maharashtra Cooperative Bank. Centrum Capital, a unit of Centrum Financial Services, and its partner BharatPe, a payments system company, are expected to invest Rs 18 billion in the proposed small finance bank.
Bindra had stated earlier that Centrum and BharatPe will invest Rs 9 billion in the proposed small finance bank in the first year, which will be used to launch the business and acquire PMC Bank. The next round of equity funding will take place the following year.
PMC Bank was placed under restrictions in September 2019 after it was found that the bank and its management had engaged in several under-hand dealings that resulted in losses.