Unity Small Finance Bank has taken over Punjab and Maharashtra Co-Operative Bank (PMC) in a revival programme for the scandal-hit lender.
The recent rumblings at BharatPe owner RIPL over Grover’s leaked outbursts against a banker and allegations of wrongdoings are unlikely to affect Unity SFB that is run by an independent board, Centrum’s chairman Jaspal Bindra said.
“It is a matter for RIPL and its board to resolve,” Bindra told ET in an interview on what could be Grover’s role in the bank. “After a rigorous fit-and-proper exercise, the central bank has granted the Unity SBF banking licence to Centrum as a promoter. RIPL has been permitted by the central bank to be a joint investor.”
Centrum owns 51% of Unity Small Finance Bank and the remaining is held by RIPL. The two JV partners can propose one director each, but have not done so far, said Bindra.
BharatPe has plunged into turmoil due to Grover’s management style, which has caused discontent in certain quarters within the company. The controversy started with a leaked tape revelation of his alleged abusive interaction with a Kotak Mahindra banker over an IPO allotment. It has since snowballed into broader charges of alleged corrupt practices.
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A probe ordered by the BharatPe board has allegedly found instances of payments to non-existent vendors and has raised some questions on the corporate governance standards at the company that boasts of investors such as Tiger Global and Sequoia Capital.
The small-finance bank’s board will have five independent directors, including Vinod Rai, the former comptroller and auditor general of India. He was appointed the independent chairman of Unity SFB.
The other members of the bank’s board are Sandip Ghose, a central bank veteran, Basant Seth, the former chairman and managing director of erstwhile Syndicate Bank, Subhash Kutte, former chairman of RBL Bank, and Renu Basu, from the Indian Hotels Company.
The central bank gave a go-ahead late last year for the small-finance bank to commence operations after it approved the proposal from Centrum to take over the sinking PMC Bank, a co-operative lender that missed paying depositors after revelation the management was siphoning off funds.
There has been a debate about whether the central bank would raise questions about the ‘fit and proper’ nature of the shareholders in the venture following the controversy.
