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Informist, Wednesday, Nov. 6, 2024

 

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--Utkarsh Small Fin Bk: Will like to foray into RBI's wholesale e-rupee pilot 
--Utkarsh Small Finance Bank: In talks with 2 cos for co-branded credit cards 
--Utkarsh Small Fin Bk: May merge with NBFC post reverse merger with parent 
--Utkarsh Small Fin Bk MD: See scope for merger of small fin banks with NBFCs 
--Utkarsh Small Fin Bk MD: See need for small finance banks to consolidate 

 

By Priyasmita Dutta and Cassandra Carvahlo
 

MUMBAI – Leading small finance bank Utkarsh Small Finance Bank may consider merging with a non-bank financing company once the ongoing reverse merger with its parent company – Utkarsh CoreInvest Limited – is completed, its Managing Director and Chief Executive Officer Govind Singh said Wednesday. "There is scope for merging small finance banks with NBFCs, we may also consider it once the reverse merger is complete," Singh told Informist on the sidelines of the Business Standard BFSI Summit here. 

 

The Utkarsh Small Finance Bank's board on Sept. 20 approved the merger of Utkarsh CoreInvest with the small finance bank. Singh said the reverse merger is expected to be completed in a year. 

 

Due to the intense competition in the small finance banking sector space, there is a need to consolidate, though a merger of one or more small finance banks is not the solution, Singh said. "The solution is to merge a small finance bank with an NBFC that would improve their operations," Kumar said. Currently, there are 11 small finance banks in the country with many of them having aspirations to become universal banks. 

 

On expansion plans, Singh said after launching a co-branded credit card with online shopping site Flipkart, the small finance bank is in talks with two more companies to launch co-branded credit cards. A resolution to the discussions may come "soon", Singh said, without divulging the names of the two companies. Utkarsh Small Finance Bank in August introduced a co-branded credit card with Flipkart’s fintech venture super.money.

 

Besides expanding the credit card business, the small finance bank is also focussing on technological innovation, including foraying into the Reserve Bank of India's wholesale Central Bank Digital Currency pilot. "Though CBDC is not our first priority in the digital segment, at some point we may want to do that as well," Singh said. If the plan goes through, Utkarsh may become the first small finance bank to foray into the sector.

 

About 16 banks are part of the RBI's wholesale Central Bank Digital Currency pilot, launched in December 2022. "We are currently doing some tests with CBDC, and we will observe the findings, and accordingly a call may be taken on whether we will go forward with the pilot," he said.  End

 

Edited by Saji George Titus

 

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