The board of directors of Centrum Capital approved the sale of its two wholly-owned subsidiaries – Centrum Financial Services Ltd (CFSL) and Centrum Microcredit – to its proposed step-down subsidiary, which is the proposed Small Finance Bank.
The decision was taken at a meeting of the board on Tuesday and is subject to members and other requisite statutory and regulatory approvals, Centrum Capital said in a stock exchange filing.
“...pooling of business of the subsidiary of the company into the proposed small finance bank. This is required to be done as per the in-principle approval received from the Reserve Bank of India to set up the SFB,” it said on the rationale of the transaction for Centrum Financial Services. In the case of Centrum Microcredit, it said, “This will give the proposed SFB a significant head start in its business in preferred areas.”
The indicative time period for completion of both transactions is two months.
The RBI accorded “in-principle” approval to CFSL on June 18, to set up an SFB. This approval was in specific pursuance to CFSL’s offer in response to PMC Bank’s Expression of Interest (EoI) notification.