The transaction between the two companies would be subject to due diligence, agreement on the appropriate on the appropriate transaction structure, definitive documentation and Board, shareholders, regulatory, NCLT and other third-party approvals, as applicable, the release said.
Throwing more light on the above development, MR Rao, MD & CEO, Bharat Financial Inclusion told CNBC-TV18 that the due diligence is yet to be done on both sides and the final terms are yet to be negotiated with IndusInd Bank. Only post due diligence and terms are agreed by both, we can say that the deal is done deal, he added.
Stating the advantage post the deal and being converted into a bank, Rao said it would enable them to become more efficient in making cashless transactions, have more products and also the cost of funds will be lower.
They would also be able to handle competition from small finance banks and help mitigate lot of risks, he said.
When asked if they would become a subsidiary or merged into the bank, Rao said the structure of transactions have yet to be decided.
Talking about the current cost to income being around 52 percent, he said that was due to demonetisation and election but once more digitization comes into play and they become cashless, tech savvy, the cost to income ratio would likely go below 40 percent.
“So we will get lot of synergies by being part of a bank and that will play out in terms of operational efficiencies on the ground,” he said.
On the business outlook, he said growth is on tract, the one-time impact of demonetisation is fully provided, all the new loans given from January 2017 are clocking at 99.9 percent repayment. He said, they standby the guidance given for the year in terms of growth at 50 percent.For the entire interview, watch video