Financial services firm Centrum Capital Ltd’s non-banking finance arm has paired up with fintech startup BharatPe to set up a small finance bank that will take over crisis-hit Punjab & Maharashtra Co-Operative Bank Ltd (PMC Bank).
Centrum said Friday its unit Centrum Financial Services Ltd has received in-principle approval from the Reserve Bank of India to set up the small finance bank, paving the way for the revival of PMC Bank.
Merchant payments venture BharatPe and Centrum will be equal equity partners in the proposed lender.
The two companies said in a joint statement the small finance bank will be guided by the directions and timelines of the RBI on the amalgamation of PMC Bank.
PMC Bank found itself in the midst of a crisis two years ago as it built an unusually large chunk of its loan book with real estate developer HDIL, which is currently facing insolvency proceedings.
The RBI superseded the bank’s board and appointed an administrator as it explored ways to restructure the bank and possibly find a new owner. Centrum and BharatPe had joined hands to offer a takeover plan for PMC Bank.
Jaspal Bindra, executive chairman at Centrum Group, said a new banking licence will be issued to a NBFC after a gap of nearly six years.
BharatPe was co-founded by Ashneer Grover and Shashvat Nakrani. Grover is also the company’s CEO. The startup has raised almost $300 million in equity and debt till date. Its list of marquee investors includes Coatue Management, Insight Partners, Ribbit Capital, Steadview Capital, Beenext, Amplo and Sequoia Capital.