Unity Small Finance Bank commences operations as small finance bank

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Unity Small Finance Bank, the joint venture between Centrum Group and Bharatpe, on Monday (November 1, 2021) has commenced operations as a small finance bank.

“The Reserve Bank of India (RBI) had issued a licence to the bank under Section 22 (1) of the Banking Regulation Act, 1949 to carry on the business of small finance banks in India,” the RBI said in a press release.

Unity Bank will be a digital-first bank with a business model of collaboration and open architecture, uniting all its stakeholders to deliver a seamless digital experience.

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The bank commences operations with Centrum’s successful MSME and microfinance businesses and teams, a capital infusion of approximately Rs 1,100 crore, total assets of about Rs 2,400 crore, an active customer base of over 2 lakhs, 145 offices including a branch in Centrum House, Mumbai, getting off to a strong start, the bank said.

Jaspal Bindra, the executive chairman, Centrum Group, said, “We thank the RBI for giving us the approval to commence operations at Unity Bank. We aim to make it a truly New Age Bank. The Bank is well capitalized, significantly higher than the minimum regulatory requirement, giving us the platform to build a robust technological infrastructure, hire the best talent and work with credible vendor partners. The combined expertise of Centrum and BharatPe, business strengths and our proven success, will provide a strong foundation to drive growth in the bank.”

“I would like to sincerely thank the Reserve Bank of India for granting us the approvals for commencing the operations of Unity Bank. We are committed to work tirelessly to build India’s first truly Digital Bank. With the capitalization and approvals in place, we will now focus on building tech-first products that will redefine the way India banks,” said Ashneer Grover, co-founder and managing director, BharatPe.

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On October 12, the RBI gave the final licence to Unity Small Finance Bank, a consortium floated by Centrum Financial Services and Resilient Innovations, an arm of the digital lending platform Bharatpe, four months after giving it an in-principle nod to establish a small finance bank and then take over the scam-ridden Punjab and Maharashtra Cooperative (PMC) Bank, which was under direct RBI control since mid-2019.

In June, the RBI had given the in-principle approval for the 12th small finance bank licence to the consortium provided its takes over PMC, the city-based cooperative lender under restrictions for more than two years after a massive over Rs 7,000-crore fraud. The Centrum group owns 51 percent in Unity Small Finance Bank and the remaining equity is held by the Gurugram-based Bharatpe.

Bharatpe was co-founded by Ashneer Grover and Shashvat Nakrani in 2018 to help small merchants get finance easily. In 2018, it launched the first UPI interoperable QR code, the first zero MDR payment acceptance service and in 2020, it launched the only zero MDR card acceptance terminals BharatSwipe.

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Currently serving over 70 lakh merchants across 140 cities, Bharatpe is a leader in UPI offline transactions, processing over 11 crore transactions per month with an annualized transaction value of over $10 billion.