Centrum & BharatPe to jointly run PMC Bank, to infuse Rs 900 cr in the SFB
Mumbai, June 19 A new small finance bank jointly owned by Centrum Financial Services and BharatPe is all set to rescue the scam-hit Punjab and Maharashtra Co-operative Bank (PMC). The Reserve Bank of India has blessed the deal by granting in-principle approval to Centrum Financial Services to set up the small finance bank, which will be approved by RBI in six years.
As per the rescue plan, Centrum will first operationalise the SFB in 120 days. Thereafter, the RBI will place in public domain a draft scheme of amalgamation of PMC Bank with Centrum SFB. Mobile payments firm BharatPe will hold 50 per cent in the newly-created SFB. The last step will be the government sanction for the scheme. It is believed that all this can take about six months, subject to the fact that there was no legal challenges or objections raised by any of the stakeholders.
Jaspal Bindra, Executive Chairman, Centrum Group, said that CFSL and BharatPe will commit Rs 900 crore to the SFB in the very first year. As and when required, the partners will commit Rs 900 crore more. The minimum paid-up net worth requirement for starting an SFB is only Rs 200 crore. Once CFSL takes over PMC Bank, it would get a ready-made branch network of about 100 branches in Mumbai and in a few other States.
CFSL is a step-down subsidiary of diversified financial services group Centrum Capital. It provides credit to small and mid-size companies.
'In-principle' approval has been accorded in specific pursuance to CFSL's offer of February 1 in response to the Expression of Interest issued by Mumbai-based PMC Bank, an RBI statement said.
Talking to Bizz Buzz, Vishwas Utagi, president, PMC Depositors' Association, said, "The RBI move is purely in favour of investors and why should the depositors park their money with the bank in such a situation."
Utagi, a former AIBEA secretary who is also the convenor of Trade Union Joint Action Committee of Maharashtra, also said that this is the first step by RBI to convert one of the 44 co-operative banks which are currently under its supervision, all the co-op banks into small finance banks. As more as 15 co-op banks' licences have been cancelled by RBI during the pandemic. In the name of rescuing the crisis-ridden co-op banks, the regulator was trying to exploit them."