With the Reserve Bank of India (RBI) having given a period of 120 days to Centrum Financial Services Ltd (CFSL) to set up a small finance bank, which will eventually take over the troubled Punjab and Maharashtra Cooperative Bank (PMC), the consortium has said that the timeline is “workable” and it hopes to complete the process sooner than that.
Centrum Capital, the holding entity for CFSL, and its partner BharatPe, a payments system company, will infuse Rs 1,800 crore into the small finance bank.
Centrum Capital is the holding entity for CFSL and its partner is BharatPe, a payments system company. RBI last week, had given “in-principle” approval to CFSL to set up a small finance bank.
Talking to NDTV, BharatPe’s Group President Suhail Sameer said, “the timelines are workable and we hope to sort of complete the process sooner.”
Mr Sameer further informed that during the 120-day period while CFSL will set up a small finance bank, the RBI simultaneously will chart out a reconstruction plan for PMC Bank.
“Once we become operational, they (RBI) will take a decision to merge PMC with the small finance bank,” he informed.
Mr Sameer said that for them and the RBI, the interest of the small depositors, who had lost their lives’ savings in the PMC Bank scam, is paramount.
“They have waited for so long, I will ask the depositors to sit tight for some more time and a meaningful outcome will come out of it,” he said.
Elaborating on the process of setting up a small finance bank and meeting the RBI timeline, the BharatPe head said, “we have been communicating with RBI for some time and we are ready and hope to do it sooner. This includes approval from lenders of Centrum to convert its operations into a bank which may take time. Also it requires end audit from RBI for changing operations. However, timelines are workable and we hope to sort of complete the process sooner than later.”
On being asked how does it feel for a newbie digital payments startup like Bharatpe to be on the cusp of becoming half owner of a bank, Mr Sameer said, “It is a great victory for us and a great responsibility.”
He said that the RBI had been watching them and taking note of their performance for quite some time and what the company had achieved in terms of generating payments worth more than billions of dollars in a short span of time, does not happen by fluke.
In addition to this, Mr Sameer said, “in Centrum we have a credible partner and with our combination of conventional lending capabilities and digital capacities, we hope to set up India’s truly digital bank.”