Utkarsh, a Varanasi-based micro-finance institution which had received an in-principle licence from Reserve Bank of India (RBI) last year to start a small finance bank, is planning to start operations in the second week of 2017, Govind Singh, Managing Director and Chief Executive Officer of the micro-lender said.
Final licence
“We have already applied for the final licence. It may take a couple of months to get the final approval. We are planning to start operations in the second week of January,” Singh said. He also said the lender would aim to open 450 branches by the end of March 2017.
The micro-lender has raised Rs.395 crore of primary equity from 8 resident investors to comply with the Small Finance Bank (SFB) guidelines of making the company resident-owned and controlled.
HDFC, ICICI
Some of the investors are HDFC Ergo General Insurance, HDFC Standard Life, ICICI Prudential Life Insurance, RBL Bank Ltd., Shriram Life Insurance, Small Industries Development Bank of India (SIDBI) and private equity funds such as Arpwood Investments and Faering Capital.
The funds will be used to further expand business, particularly in introducing new banking products and this investment will take care of capital requirements for the next 3-4 years, acording to a statement from the company. Utkarsh’s area of operations is mainly in the Hindi heartland of UP, Bihar, Jharkhand, Madhya Pradesh and Chhattisgarh.
10 entities
Last year, RBI gave in-principle licences to 10 entities to start a small finance banks. The primary mandate for these entities is to extend small loans to households and business. RBI had mandated these entities to start operation within 18 months of receiving the nod.
Source: The Hindu
