Our MSME and microfinance business will be merged with the small finance bank from day one. Then over time, we will review and implement new businesses in the bank and those new businesses can either completely start from scratch and be built originally in the bank or could be transferred from either BharatPe or Centrum’s stable, says Jaspal Bindra, Chairman, Centrum Group.
A consortium of Centrum Financial Services and BharatPe has got RBI nod to establish a small finance bank. What are your views on this?
We were always very clear that our goal is to eventually become a bank. Today fortunately, that goal is a reality. We were also amply clear that we want to be a retail bank and that is why all our forays into lending over the last few years were retail driven, in fact exclusively retail driven. The final aspiration is to be digital.
So being a retail digital bank was the ultimate aim and our choice of partner in the banking venture explains our aspiration to be digital. Centrum is partnered with BharatPe, a fintech company. When I look at cues from the markets outside of India, we see that there is a very large untapped opportunity for digital banking and that is why we have sufficient motivation to make a very serious attempt and being India’s first digital bank.
I spoke to some of the shareholders. They are keen to understand what the model will be, what kind of numbers we are talking about and the size of the opportunity. Can you share some specifics?
It is too early to give a sense of the balance sheet numbers. But we will be in continual dialogue with the market and our shareholders and we will obviously keep them apprised of how things progress.
But we can definitely address the capital issue. We had earlier also stated that between Centrum and BharatPe, we are committing to a capital of Rs 1,800 crore against regulatory requirements of Rs 200 crore. We wanted to be abundantly capitalised. Today I am happy to reconfirm that Rs 1,800 crore is the minimum that we will bring in at the commencement of business. It will be higher than Rs 1,800 crore.
What happens to your other businesses? As we understand MSME and some parts of the business merge with this new entity which will be created at the commencement of the banking operations. What happens to other businesses like wealth, broking, etc?
To start with, our MSME and microfinance business will be merged with the small finance bank from day one. Then over time, we will continually review and implement which new businesses we initiate in the bank and those new businesses can come from either of the sources — completely start from scratch and be built originally in the bank or they could be transfers from either BharatPe or Centrum’s stable. We could look at making third party acquisitions from the related markets in our segment.
We are going to keep all these options open. The mantra is going to be growth and we are going to tap every possible channel to grow.
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