Shares of Centrum Capital
rallied 16 per cent and hit a 52-week high of Rs 58.50 on the BSE in intra-day trade on Monday after Centrum Financial Services Limited (CFSL) received an “in-principle” approval from the Reserve Bank of India (RBI) to set up a Small Finance Bank (SFB). CFSL is step down subsidiary of Centrum Capital.
Centrum Group, on Friday, said it has also received approval from the RBI to take over the troubled cooperative lender Punjab and Maharashtra Co-operative Bank Limited (PMC Bank).
“The Reserve Bank of India (RBI) has today decided to grant “in-principle” approval to Centrum Financial Services Limited (the applicant) to set up a small finance bank under general “Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector” dated December 5, 2019,” RBI said in a press release on dated June 18, 2021.
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 the requisite conditions laid down by RBI as part of “inprinciple” approval, RBI said.
Centrum Capital, the holding entity for CFSL, and its partner BharatPe, a payments system company, will infuse Rs 1,800 crore into the small finance bank and will get 120 days to commence operations.
The consortium of Centrum and BharatPe had expressed an interest in taking over PMC Bank. According to reports, both Centrum and BharatPe will hold 50 per cent in the small finance bank and the assets and liabilities of the multistate cooperative bank will be transferred to it.
Meanwhile, Centrum Capital
said its board will meet on Tuesday, June 22, 2021, to consider a proposal for obtaining an enabling approval from the shareholders of the company, regarding the proposal of raising of funds through issue of securities either by way of rights issue or by way of a private placement (including but not limited through a qualified institutional placement).
At 11:21 am, Centrum Capital was trading 7 per cent higher at Rs 54 on the BSE, as compared to 0.51 per cent decline in the S&P BSE Sensex. The trading volumes on the counter more-than-doubled with a combined 16.3 million shares changing hands on the NSE and BSE.