The Reserve Bank of India (RBI) on Friday decided to grant in-principle approval to Centrum Financial Services Ltd to set up a small finance bank.
Centrum had applied for such approval on February 1 in response to an expression of interest notification published on November 3, 2020 published by Punjab and Maharashtra Cooperative (PMC) Bank Ltd.
"The RBI would consider granting a licence for commencement of banking business under Section 22(1) of the Banking Regulation Act 1949 on being satisfied that the applicant has complied with requisite conditions laid down by RBI as part of in-principle approval," it said in a statement.
The approval is under the general guidelines for on tap licensing of small finance banks in the private sector dated December 5, 2019.
Centrum is a diversified financial services group providing services like investment banking, SME, MSME and micro finance loans and institutional broking catering to FIIs, pension funds, mutual funds, domestic institutions and HNIs.
The RBI and PMC Bank are engaging with prospective investors to secure best possible terms for depositors and other stakeholders while ensuring long-term viability of the reconstructed entity.
The RBI superseded PMC Bank board in September 2019. About 70 per cent of its total loan book of Rs 8,383 crore as on March 31, 2019 had been taken by Housing Development and Infrastructure Ltd (HDIL).
The bank had Rs 11,600 crore in deposits. The police arrested Joy Thomas, former Managing Director of PMC Bank.
( With inputs from ANI )
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