The stock has increased by 278.14% in last one year, while the benchmark index S&P BSE Sensex has increased by 51.37%.
This surge in stock price was after Centrum Financial Services Limited (CFSL) received an “in-principle” approval from the Reserve Bank of India (RBI) to set up a Small Finance Bank (SFB).
Centrum Group announced on Friday that it has received RBI approval to take over the troubled cooperative lender Punjab and Maharashtra Co-operative Bank Limited (PMC Bank).
“The Reserve Bank of India (RBI) has today decided to grant “in-principle” approval to Centrum Financial Services Limited (the applicant) to establish a small finance bank in accordance with the general “Guidelines for ‘on tap’ Licensing of Small Finance Banks in the Private Sector” dated December 5, 2019,” the RBI stated in a press release dated June 18, 2021.
The RBI stated that it would consider granting a license for the commencement of banking business under Section 22 (1) of the Banking Regulation Act, 1949, if it was satisfied that the applicant had complied with the requisite conditions laid out by the RBI as part of “inprinciple” approval.
Centrum Capital, CFSL’s holding company, and its partner BharatPe, a payments system company, will invest Rs 1,800 crore in the small finance bank, which will have 120 days to begin operations.
The consortium of Centrum and BharatPe had expressed an interest in taking over PMC Bank.
Meanwhile, Centrum Capital announced that its board of directors will meet on Tuesday, June 22, 2021, to consider a proposal for obtaining enabling approval from the company’s shareholders for a proposal to raise funds through the issuance of securities, either through a rights issue or a private placement (including but not limited through a qualified institutional placement), and also consider and approve the Audited Financial Results (Standalone and Consolidated) of the Company, for the Financial Year ended March 31, 2021; and Consider the recommendation of dividend, if any, for Financial Year 2020-21.
Centrum, which was founded in 1997, has diversified fee businesses as well as a lending platform for institutions and individuals. Investment Banking, Mid-corporates and SME credit, and Broking to FIIs, Pension Funds, Indian Mutual Funds, Domestic Institutions, are few of institutional services offered by them. It also offers MSME credit, Wealth Management Services to HNIs and Family Offices, Affordable Housing Financing in Tier 2 and Tier 3 Cities, Micro Finance Loans, and Retail Broking. Its Asset Management division provides funds in Private Debt and Venture Capital.
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