RBI grants SFB licence to Centrum-BharatPe consortium, suitors of PMC Bank
- Rommel Rodrigues
- Oct 12, 2021
MUMBAI: The Reserve Bank of India (RBI) today granted Unity Small Finance Bank Limited (USFBL) the licence to operate as a Small Finance Bank (SFB) in the country.
USFBL promoted by a consortium of Centrum Financial Services Ltd (CFSL) and BharatPe was granted 'in-principle' approval on June 18, 2021, to set up the SFB.
CFSL is a step-down subsidiary of listed company Centrum Capital which is in the business of providing credit to small and mid-sized companies ranging from Rs 2 lakh to Rs 2 crore. BharatPe a fintech company is a part of Resilient Innovations Pvt. Ltd, which caters to small merchants and small business financing.
This development comes as a piece of good news for lakhs of depositors of the troubled Punjab and Maharashtra Cooperative Bank (PMC) as the consortium led by Centrum under its SFB has expressed interest to take over PMC which had kindled hope for the depositors to get back their investments.
This is the first time in six years that RBI has granted a banking licence and its notification said that the official communication on the commencement of operations as well as the inclusion of the name of the bank in the second schedule to RBI Act, 1934 would follow in due course.
It has been over two years since PMC was placed under restrictions by the RBI after a massive fraud of Rs 7,000 crore was unearthed when the bank’s MD Joy Thomas confessed to hiding details of defaults by real estate firm Housing Development and Infrastructure Ltd (HDIL) in October 2019.
Thomas admitted that dummy accounts were created on his instructions to hide the non-performing accounts of HDIL from the bank’s board, auditors and RBI for many years by concealing the default on loans to the tune of Rs. 6,500 crore taken by HDIL. The bank was then put under restrictions and thousands of fixed depositors have not been able to access their funds since then.