Small finance bank licence issued to Centrum-BharatPe consortium

The Reserve Bank of India issued a small finance bank (SFB) licence to a consortium of fintech company BharatPe and Centrum Financial Services Ltd. The new business entity “Unity Small Finance Bank” will see Centrum’s MSME and micro finance businesses merged into itself.

In a statement, Centrum Group’s Executive Chairman Jaspal Bindra said: “We aspire to be India’s first Digital Bank”.

This sheds light on the need for traditional lenders to expand their digital infrastructure in order to address the market’s requirement for digital products.

There have been several examples of small finance banks and non-banking financial companies collaborating with fintech companies to access and monetise the data collected by these consumer tech firms.

This has particularly gained momentum in the buy-now-pay-later (BNPL) and the micro-lending models, where companies like Paytm, Google Pay, Amazon Pay, etc have partnered with NBFCs to assess creditworthiness of an existing customer and present it to the lender as a potential borrower.

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