BharatPe’s wild card entry into the fintech-banking sweepstakes

BharatPe and Centrum join hands to revive scam-tainted PMC Bank, but there are hurdles on the way. From merging two distinct working styles to dealing with the mess at the cooperative lender, the two companies will have their hands full



Pratik Bhakta

June 23, 2021

11 Min Read

If anyone in India’s startup ecosystem had been asked to guess which financial technology company would be the first to get a banking license, the answer likely would have been Sachin Bansal’s Navi Technologies. After all, the Flipkart cofounder has invested $400 million of his own fortune in the business, acquired a decade-old non-banking finance company, and applied to the Reserve Bank of India for a commercial banking license.

Or some might have rooted for Vijay Shekhar Sharma’s Paytm Payments Bank, which has been operational since 2017.

Few would have expected the three-year-old BharatPe to win the race—especially considering RBI had rejected its application for an NBFC license last year. Some might argue that technically it hasn’t won the race. And they might be right.

BharatPe has taken an unconventional route, partnering with banking veteran Jaspal Singh Bindra-led Centrum Financial Services that has secured an in-principle license for a small finance bank. The bank, yet unnamed, will absorb the scandal-hit Punjab & Maharashtra Cooperative Bank and its gross non-performing assets, or bad loans, of Rs 3,518 crore ($475 million) as of March 2020.

BharatPe will come in as an equal joint venture partner in this entity. Exactly how much stake it will take and at what price are undisclosed. But executives at BharatPe are clear that Bindra and Centrum will be at the driving seat of the small finance bank. The RBI announcement on the matter does not name BharatPe, as only one entity can be granted the license.

BharatPe and Centrum have said they plan to start operations of the small finance bank, which will be a digital play, in 120 days, as asked by RBI. They will invest Rs 900 crore ($122 million) in the entity to begin with, and another Rs 900 crore eventually.




As a premium subscriber, you will get access to 3+ premium articles a week
Limited time offer
Launch price
/ Year
INR 3,999
Save 25% with our launch offer.
Please apply the code at checkout.

copyCopy Code

Upgrade Now



As a premium subscriber, you will get access to 3+ premium articles a week

Smart Information, Better Decisions

We report on the latest and most important developments in India’s biggest tech companies and also disruptive startups so you can make better decisions.

Seasoned Team

Tracking the highs and lows of India’s biggest internet companies over the past decade has given us access to the right decision-makers to interpret the latest state of play.

Inside View with Org Charts

Know the key decision-makers with Org Charts. We thrive on decoding boardroom conversations so we can bring you a 360° view of what's happening at India's high-growth companies.

Filtering the Noise

New economy companies cannot always be evaluated using traditional methods. We analyze the relevant metrics, ask the tough questions to get you the right picture