Centrum-BharatPe’s Unity Small Finance Bank starts operations

MUMBAI: Unity Small Finance Bank Ltd, promoted by Centrum Financial Services Ltd and Resilient Innovations Pvt. Ltd (BharatPe), commenced operations on Monday, the Reserve Bank of India (RBI) said, taking Punjab and Maharashtra Cooperative (PMC) Bank a step closer to resolution.

In February, Centrum Financial Services and BharatPe had submitted a joint proposal to take over PMC Bank. Centrum Financial Services is a step-down subsidiary of listed entity Centrum Capital and provides credit to small and mid-sized companies ranging from ₹2 lakh to ₹2 crore. Resilient Innovations Pvt. Ltd, which operates BharatPe, will be an equal partner in the small finance bank, Mint had reported in June.

Jaspal Bindra, executive chairman of the Centrum Group, had told Mint in June that once the bank is operationalised, the central bank will draft a scheme which will be about the amalgamation of PMC Bank with the new small finance bank. It will then go to the government for approval and official notification.

PMC Bank, a multi-state cooperative lender, was on the brink of a collapse when the regulator seized it on 24 September 2019, capped cash withdrawals and launched an investigation into its accounting lapses. In June, RBI cleared the decks for its takeover by Centrum and BharatPe and the licence was issued last month. Centrum’s micro, small and medium enterprise (MSME), and microfinance businesses shall be merged into the bank.

PMC Bank had total deposits of ₹10,535.45 crore and total advances of ₹4,123 crore as on 31 March 2021, according to data on its website.

“The SFB will start with a loan book of ₹1,500 crore, focused only on retail lending through digital channels. We plan to have a national reach likely through this digital channel rather than physical presence," Jaspal Bindra, executive chairman of Centrum Group, said in an interview last month.