BharatPe wins a rare banking licence in India

Hardly a three-year old payment startup, BharatPe, will be the half-owner of a bank in India which is a prize that has avoided many pedigreed tycoons of the country.

Jaspal Bindra, who is going to own the other half, had to wait for six years to receive this opportunity, ever since his leadership as the top Asia banker at Standard Chartered Plc ended amidst a bulk of losses in India as well as Indonesia.


The regulator is rewarding BharatPe and Bindra for accepting to help remove the debris of a scam-tainted small leader. After Punjab & Maharashtra Cooperative Bank made 70 per cent plus of its loans to a bankrupt shantytown developer, it had collapsed. For the prevention of a run, the Reserve Bank of India (RBI) had to stop the depositors of PMC from freely accessing their money in the month of September, 2019.

Two years later and after two COVID-19 waves, the stuck saves have found a resolution: BharatPe and Bindra’s Centrum Capital Ltd. will be putting their financial businesses into a newly licensed bank with tasks of making small-ticket loans to unbanked segments of the population. For the privilege of receiving the license, the new lender has to assume at least some liabilities of PMC along with its moth-eaten assets.

As of yet, how much of the past baggage the new bank is expected to carry is not clear. After RBI relaxed withdrawal restrictions in June 2020, PMC’s March 2020 deposit base of ₹107 billion might have shrunk. But, around 80 per cent of its 45 billion rupee loan book had gone bad by the month of March last year.

BharatPe allows merchants to accept payments from apps that are famous amongst consumers. It has not joined the unicorn club of startups with at least $1 billion in valuation.

The RBI has responded to the coronavirus pandemic by slashing interest rates as well as making around 7 percent of GDP available in easy liquidity.