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MUMBAI: The Reserve Bank of India (RBI) is examining an application filed by Centrum Financial Services and fintech startup BharatPe for a licence to set up a small finance bank and take over Punjab and Maharashtra Cooperative (PMC) Bank, a senior RBI official said on Friday.

“I think Centrum and its partner BharatPe have submitted their application for licence and is at an advanced stage of consideration. Once that final licence is approved, we will very shortly be proceeding ahead with the draft scheme and getting the requisite approvals. So, it is in an advanced stage," said Rajeshwar Rao, deputy governor, RBI.

The multi-state cooperative lender was on the brink of a collapse when the regulator seized it on 24 September 2019, capped cash withdrawals and launched an investigation into its accounting lapses. In June, RBI had cleared the decks for its takeover by Centrum and BharatPe.

In February, Centrum Financial Services and BharatPe had submitted a joint proposal to take over PMC Bank. Centrum Financial Services is a step-down subsidiary of listed entity Centrum Capital and provides credit to small and mid-sized companies ranging from 2 lakh to 2 crore. Resilient Innovations Pvt. Ltd, which operates BharatPe, will be an equal partner in the small finance bank, Mint had reported in June.

PMC Bank had total deposits of 10,535.45 crore and total advances of 4,123 crore as on 31 March 2021, according to data on its website.

Jaspal Bindra, executive chairman, Centrum Group, had said in June that the new entity has to be operational in the next 120 days and only when that is done, will the RBI draft a scheme on amalgamation with PMC Bank. The plan will then be sent to the government for approval and official notification. Under Section 45 of the Banking Regulation Act, only a bank can be merged with another and, therefore, the process will start only once the small finance bank is created.

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