BharatPe’s joint venture with non-banking financial company Centrum Finance is all set to come up with a finance bank & acquire Punjab & Maharashtra Cooperative bank is going to bring about a revolution amongst the fintech players. The purpose behind this SFB is RBI’s approach to revive a dying bank under the dynamic leadership of BharatPe. The Rs.6,500 crore fraud at PMC bank, concealed loan defaults by real estate firm Housing Development & Infrastructure Ltd.(HDIL) of Wadhawan group has forced RBI to freeze depositors’ accounts. The resolution plan is to repay depositors’ principal along with interest. The SFB is going to be a 50-50% partnership between BharatPe & Centrum Finance. Conversion of an NBFC to SFB is provided three years’ time after achieving a net worth of Rs.500 crore before its initial public offering (IPO). The bank is going to be the first of its kind merchant-focused bank. The SFB would offer loans to small & medium enterprises as well as unsecured retail loans for less than Rs.50,000. BharatPe will lead in acquiring merchants & providing technology support while Centrum will look into the finances & compliances. The firm will retain its identity as a payment-focused fintech. BharatPe is still going to work with multiple other banks (ICICI bank, Yes bank). BharatPe has a strong team of 14 people including its founders who are experts in their respective fields & are working towards bringing success.
Source: Economic Times