Ashneer Grover the CEO and co-founder of BharatPe said that the bank should be “up and running by the end of this year”
The Reserve Bank of India (RBI) gave an in-principle nod to Centrum Financial Services Ltd (CFSL) to set up a small finance bank (SFB) that will pave the way for the troubled Punjab and Maharashtra Cooperative Bank (PMC Bank)’s takeover.
The Small Finance Bank will be guided by the directions and timelines of the RBI on the amalgamation of PMC Bank, Centrum said.
Centrum, along with fintech company BharatPe, in a consortium had bid for PMC Bank earlier this year.
Ashneer Grover the CEO and co-founder of BharatPe has told a TV channel that Centrum and BharatPe will set up a new entity, where both the parties have equal ownership. This new entity will operate the small finance bank. PMC Bank will then get merged into this small finance bank that will be set up.
“BharatPe is delighted at the opportunity to build a high-performing technology-led small finance bank serving the payment, investment, and credit needs of the under-served,” Grover said.
The SFB will get 120 days to commence operations. The amalgamation with PMC Bank is a separate process that would involve notification of the scheme by the government, said Jaspal Bindra, executive chairman, Centrum Capital.
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Bindra also said that in the first year the partners would put in Rs 900 crore, which will be used for starting the business and acquiring PMC Bank. The second round of equity funding of Rs 900 crore will happen in the following year, Business Standard reported
In 2019, after a massive scam was unearthed wherein dummy accounts were used to hide its huge exposure to the bankrupt real estate developer HDIL, the PMC Bank was put under a moratorium. While the restrictions were initially set for six months, they were extended from time to time and the wait of the bank’s deposit holders has stretched for almost two years now.
This takeover by Centrum offers a ray of hope for all PMC depositors who are hoping to get full access to their money in times to come.
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