Recently listed private sector lender RBL Bank announced on Monday that it had picked up 9.99 per cent stake in Varanasi-based Utkarsh Micro Finance besides inking a deal to offer its product portfolio to the customers of Utkarsh.

In a stock exchange filing, RBL Bank said, “The transaction has got all the necessary regulatory approvals.”

Utkarsh has received in-principle approval from the RBI for setting up a small-finance bank and is expected to commence operations soon.

Vishwavir Ahuja , MD and CEO, RBL Bank, said: “This is a strategic partnership rather than the mere acquisition of a minority stake in Utkarsh, one of India’s finest and well-governed micro-finance institutions. Personally, I am very happy and excited to be a part of this partnership.

“It will help us extend our distribution footprint and strengthen our financial inclusion initiatives across the rural hinterland. We will strive to explore joint business opportunities that are beneficial to Utkarsh, RBL Bank and to our customers.”

Govind Singh, MD and CEO, Utkarsh Micro Finance, noted: “The long-term partnership with RBL Bank will help us augment our bouquet of products and services, including ancillary services. We hope to greatly benefit from RBL Bank’s domain knowledge of the banking and financial sector.”

Third in three months RBL Bank’s announcement is the third by a private sector bank picking up stake in a micro-finance company in the last three months.

The move, bankers say, will up their business in the un-banked/under-banked areas where micro-finance companies operate besides fulfilling the bank’s obligations set out by the RBI on priority sector lending.

Prior to this, IDFC Bank acquired 100 per cent stake in Tiruchi-based Grama Vidiyal Micro Finance (with ₹1,500 crore of assets under management) on July 12, 2016, and Kotak Bank picked up BSS Microfinance for ₹139.2 crore in an all-cash deal on September 30.

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