CEO Ashneer Grover opens up about BharatPe's bid to acquire Punjab and Maharashtra Cooperative Bank

If the buyout succeeds, the plan is to turn PMC into a purely digital enterprise; will also help the company source cheap capital for lending

February 12, 2021 / 12:58 PM IST
Representational Image

Representational Image

The process to put an end to the sordid HDIL saga is underway. Fin-tech firm BharatPe has finally put in a joint bid to acquire beleaguered Punjab and Maharashtra Cooperative (PMC) Bank on February 1, along with financial services firm, Centrum, according to a top executive of the company.

"The application was made on February 1.  Now the Reserve Bank of India (RBI) will get back to us. We have the intent and capital. Between Centrum and us, we also have the credentials. Jaspal Bindra at Centrum was the head of Standard Chartered and is a very well known personality in RBI circles. We are extremely well positioned. Now it is for the government and the RBI to decide what is the path they want to take," Ashneer Grover, founder and chief executive officer of BharatPe, told Moneycontrol.

The RBI had superseded the board of the PMC Bank in September 2019 after the detection of a massive fraud. About 70 percent of its total loan book of Rs 8,383 crore as on March 31, 2019, had been taken by real estate company, HDIL. The bank had Rs 11,600 crore in deposits.

It was discovered that the bank had been allegedly running fraudulent transactions for several years to facilitate lending to HDIL through fictitious accounts and violating single-party lending rules.

The PMC bank has now received three bids from potential acquirers, including the one from BharatPe and Centrum.


The evaluation to decide the winning bidder is underway. Once that is over, the co-operative bank will approach the central bank with the proposal.

If the deal falls in BharatPe's kitty, it will help the fin-tech firm source cheap capital for lending.

"It lowers the cost of capital from a lending perspective," said Grover, adding that the plan is to make it a purely digital enterprise because it would be the first bank with fin-tech as management.

"We will make it the default bank for all fin-techs to work with," he said.

The company expects the RBI to come up with a solution by March 31.

BharatPe has been trying to get a non-banking financial company (NBFC) license for a long time now. Last year, its application was returned by the RBI after the central bank blocked NBFC plans for Mauritius-funded startups.

The move took place following geopolitical developments leading to tighter scrutiny of Chinese capital coming into Indian market.

If BharatPe manages to acquire PMC, it will have a much superior banking license.

On February 12, BharatPe announced a fundraiser of $108 million in a Series D equity round led by existing investor, Coatue Management, at a valuation of $900 million.

Besides Coatue, all the other existing institutional investors, including Ribbit Capital, Insight Partners, Steadview Capital, Beenext, Amplo and Sequoia Capital, participated in the round as well.
Priyanka Sahay
first published: Feb 12, 2021 12:58 pm

stay updated

Get Daily News on your Browser