Centrum Financial Services Ltd (CFSL) has christened its proposed banking venture as Unity Small Finance Bank (SFB).
Unity SFB, which has its registered office in New Delhi, currently has three Directors — Jaspal Singh Bindra, Executive Chairman, Centrum Capital Ltd (CCL); Sriram Venkatasubramanian, CFO, CCL; and Ranjan Ghosh, MD & CEO, CFSL.
The SFB will eventually take over the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank. Currently, there are 11 SFBs in the country.
Revamp of operations
RBI had accorded “in-principle” approval to CFSL, which is a wholly-owned subsidiary of CCL, on June 18, 2021, to set up an SFB. This approval was in specific pursuance to CFSL’s February 2021 offer in response to PMC Bank’s November 2020 Expression of Interest (EoI) notification.
Under the “in-principle” approval, CFSL will first operationalise Unity SFB in 120 days. Thereafter, the RBI will place in public domain a draft scheme of amalgamation of PMC Bank with the SFB. The last step will be the government sanction for the scheme.
Mobile payments firm BharatPe is expected to be an equal partner in Unity SFB.
In the run-up to the formation of the SFB, CCL announced a restructuring of its operations, whereby its board approved the sale of the entire business of two wholly-owned material subsidiaries — CFSL and Centrum Microcredit Ltd — to its proposed step-down subsidiary (proposed SFB), subject to members’ and other requisite statutory and regulatory approvals.
Pooling of business of the aforementioned subsidiaries into the proposed SFB is required to be done as per the “in-principle” approval received from the RBI to set up the SFB, CCL said in an exchange filing on August 24.
The consideration for the sale of the entire business of CFSL and Centrum Microcredit to the proposed SFB is ₹316 crore and ₹110 crore, respectively, per the filing. This sale is subject to adjustments for any material change in financial status till effective date of the business transfer.