BharatPe eyes PMC Bank in tie-up with Centrum

Merchant payments startup BharatPe and financial services firm Centrum Group have submitted a joint expression of interest (EoI) to the Reserve Bank of India (RBI) to take over scam-hit Punjab and Maharashtra Cooperative (PMC) Bank, a source aware of the matter said. Centrum Group is co-promoted by Jaspal Bindra, a former Standard Chartered honcho. BharatPe and Centrum will hold equal stakes in the venture.

Sources added Ludhiana-born British businessman Sanjeev Gupta’s Liberty House Group has also submitted an EoI to the RBI. The central bank has got four EoIs for PMC Bank. The identities of the other two contenders are not known yet. On Friday, the RBI extended the restrictions on PMC bank till March 2021, by when it is expected to study the proposals of the suitors.

If successful, an acquisition will boost BharatPe’s lending business. It aims to build a Rs 5,000-crore loan book in two years. According to a source, the over two-year-old Delhi-based startup will bring its tech capabilities on top of the core financial services expertise of the Mumbai-based Centrum and run it as a small finance bank.

“They want to co-run it as a digital-first bank. For BharatPe, this will reduce cost of capital. It has been wanting to lend on its own, instead of doing it only through its partner NBFC,” the source said. It is currently lending Rs 120-125 crore per month to merchant partners, who use the platform to accept digital payments.

The document inviting EoIs had said it will be open to new investors wanting to convert PMC Bank into a small finance bank. Bindra confirmed the development, while BharatPe co-founder and CEO Ashneer Grover declined to comment. A spokesperson of Liberty House also declined to comment.