Centrum Capital | Promoter BG Advisory Services released a pledge on 12 lakh shares. (Image: centrum.co.in)
Centrum Capital share price jumped over 7 percent intraday on June 21 after RBI granted 'in-principle' nod to Centrum Financial Services to set up small finance bank.
The Reserve Bank of India on June 18 granted “in-principle” approval to Centrum Financial Services Limited to set up a small finance bank (SFB), paving the way for the entity to take over the crisis-ridden Punjab and Maharashtra Co-operative bank (PMC).
This “in-principle” approval has been accorded in specific pursuance to Centrum Financial Services Limited’s offer dated February 1, 2021, in response to the Expression of Interest notification dated November 3, 2020, published by the PMC Bank, the RBI said.
Also read: RBI grants 'in-principle' nod to Centrum Financial Services to set up small finance bank
The approval is under the general “Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector” dated December 5, 2019, the RBI said.
The stock was trading at Rs 53.60, up Rs 3.35, or 6.67 percent at 10:07 hours. It has touched a 52-week high of Rs 58.50. It has touched an intraday high of Rs 58.50 and an intraday low of Rs 51.05.
The scrip witnessed spurt in volume by more than 1.81 times and was trading with volumes of 1,593,794 shares, compared to its five day average of 1,104,002 shares, an increase of 44.37 percent.
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"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 “in-principle” approval," the RBI said.
Commenting on the development, Jaspal Bindra, Executive Chairman, Centrum Group, said, “We are delighted that a new banking licence will be issued to a NBFC after a gap of nearly 6 years and would like to thank the RBI for the opportunity and confidence shown in us. We are excited to partner with BharatPe to create this new age bank, with a strong team.”
The RBI superseded PMC Bank board in September 2019. About 70 percent of its total loan book of Rs 8,383 crore as on March 31, 2019, had been taken by real estate firm HDIL. The bank had Rs 11,600 crore in deposits. The police arrested Joy Thomas, former managing director of the PMC Bank, in October. The investigators have since made a few more arrests.