The Reserve Bank of India (RBI) on Tuesday issued a Small Finance Bank (SFB) licence to the consortium of Centrum Financial Services and BharatPe that had expressed interest to acquire the ailing Punjab and Maharashtra Co-operative (PMC) Bank.

In June, the RBI had given the in-principle approval to the consortium for the SFB licence. A new bank licence has been issued after a gap of nearly six years.

The consortium as a second step would take over the assets and liabilities of the Mumbai-based PMC Bank, which has been under the RBI-imposed prompt corrective action (PCA) framework for over two years after a more than Rs 7,000-crore fraud hit the urban co-operative bank.

Earlier in the day, BharatPe announced that former State Bank of India (SBI) chief Rajnish Kumar is joining its board as the chairman and will be playing the role of a mentor for the fintech's team on the path to forming an SFB.

The new SFB has been incorporated as ‘Unity Small Finance Bank’. “Unity as a name has tremendous significance on many counts for both Centrum and BharatPe. It is the first time ever that two partners are uniting equally to build a bank," the consortium said, adding that the proposed business model is “one of collaboration and open architecture, uniting all its stakeholders to deliver a seamless digital experience”.

Centrum's MSME and microfinance businesses shall be merged into Unity Small Finance Bank. "We are delighted to receive the licence and excited to partner with BharatPe to create this new age bank, with a strong team. We aspire to be India's first Digital Bank," Centrum Group executive chairman Jaspal Bindra said.

In September 2019, the RBI had superseded the board of directors of the crisis-ridden PMC Bank, placed it under an administrator and capped withdrawals from the bank. 

In November 2020, the RBI called for bids to take over the bank.