A new bank license has been issued after a gap of nearly 6 years, and we thank the RBI for the confidence shown in the abilities of Centrum and BharatPe.
ReutersA security guard's reflection is seen next to the logo of the Reserve Bank Of India (RBI) at the RBI headquarters in Mumbai.
The Reserve Bank of India (RBI) issued a Small Finance Bank (SFB) license to the consortium of Centrum Financial Services, and Digital payments platform BharatPe, said two people familiar with the matter. A new bank license has been issued after a gap of nearly 6 years, and we thank the RBI for the confidence shown in the abilities of Centrum and BharatPe.
RBI and Centrum-Bharat could not be contacted immediately for comments.
The new bank is christened as “Unity Small Finance Bank”. Centrum is expected to make a formal announcement Tuesday late evening.
Earlier on June 18 the Reserve Bank of India Friday gave “in-principle” approval to Centrum Financial Services to set up a small finance bank through which the non-bank entity will likely merge businesses of PMC (Punjab and Maharashtra Cooperative) Bank given the final licence.
“The RBI would consider granting a licence for commencement of banking business on being satisfied that the applicant has complied with the requisite conditions laid down by RBI as part of “inprinciple” approval,” the central bank had said.
In September, 2019 the central bank placed PMC Bank under its directions after a money-laundering charge had come to light. The urban cooperative bank allegedly created fictitious assets of over Rs 6,700 crore in the form of loans, credited to Housing Development Infrastructure Ltd (HDIL), a tainted entity.
Centrum, a non-banking entity, has been scouting for opportunities in banking business. Jaspal Bindra, an ace global banker, joined the group five years ago. He is now the chairman of the group.
The regulator pulled up socks to get a new owner of the bank as the fall-out endangered millions of retail depositors for their life savings.
The bank had a total deposits of Rs 10,727.12 crore, total loans of Rs 4,472.78 crore as on March 31, 2020. The share of gross bad loans were at Rs 3,519 crore reportedly.
More than a year ago, the Delhi High Court directed the RBI and the Centre to explain as to how the depositors of scandal-hit PMC Bank are "differently circumstanced" in comparison to Yes Bank.
The bank reported a net loss of Rs 6,835 crore in 2019-20 during which it had a share capital of Rs 293 crore resulting in a negative net worth.
Reuters
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