Money & Banking

RBI grants banking licence to Unity Small Finance Bank

Our Bureau Mumbai | Updated on October 13, 2021

Bank will be jointly managed by Centrum Financial Services and BharatPe

The Reserve Bank of India on Tuesday granted a banking licence to Unity Small Finance Bank Ltd (USFBL), which was established jointly by the Centrum Financial Services Ltd (CFSL) and Resilient Innovations Private Limited (BharatPe), to carry on a SFB business in India.

RBI had accorded “in-principle” approval to CFSL, a wholly owned subsidiary of Centrum Capital, on June 18 to set up a small finance bank (SFB).

The approval was in specific pursuance to CFSL’s February 2021 offer in response to the scam-hit Punjab and Mahatashtra Co-operative (PMC) Bank’s November 2020 Expression of Interest (EoI) notification.

Aid PMC Bank

The grant of banking licence to USFBL sets the stage for RBI to place in the public domain a draft scheme of amalgamation of PMC Bank with the SFB. The last step will be the government’s sanction for the scheme.

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This announcement should come as a relief to PMC Bank depositors who have been struggling to get their deposits back for more than two years amid the Covid-19 pandemic.

“It is the first time ever that two partners are uniting equally to build a bank. The proposed business model is one of collaboration and open architecture, uniting all its stakeholders to deliver a seamless digital experience,” Centrum and BharatPe said in a joint statement.

Centrum’s MSME and micro-finance businesses will be merged into USFBL.

Digital bank

Jaspal Bindra, Executive Chairman, Centrum Group, said, “We are delighted to receive the license 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.”

Ashneer Grover, Co-Founder and Managing Director, BharatPe, said “We will work tirelessly and smartly to capture this opportunity and build India’s first truly digital bank ground up.”

Bindra said USFBL, which is an equal JV between CFSL and BharatPe, will be operational in the next few weeks.

With the establishment of USFBL, the number of SFBs in the country goes up to 12.

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Meanwhile, BharatPe, in a separate statement, said Rajnish Kumar, former Chairman of State Bank of India, has been appointed on its Board. He will also be the Chairman of the Board.

Kumar will be involved in defining the fintech company’s short-term and long-term strategy, and will also work closely with the other Board Members and CXOs on key business and regulatory initiatives, per the statement.

Published on October 12, 2021

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