By Tricitynews Reporter
Chandigarh 30th Sept:- Kotak Mahindra Bank Limited (Kotak), today announced that it has executed binding share purchase agreement to acquire 99.49% of equity shares of BSS Microfinance Private Limited (BSS), a Non-Banking Finance Company, classified as a NBFC-MFI, from existing shareholders subject to regulatory and other approvals, including Reserve Bank of India. The acquisition has been approved by the Board of Directors of Kotak Mahindra Bank and is for an aggregate all-cash consideration of Rs. 139.2 crore. As of June 30, 2016, BSS has a net worth of approximately Rs. 73 crore and microfinance loans of Rs. 483 crore in its books. It will be a subsidiary of Kotak after receiving regulatory and other approvals.
BSS has a commercially established model in the microfinance segment. This acquisition gives Kotak access to BSS’s growing customer base which currently stands at over 2,17,000 and network of 78 branches (as of June 30, 2016). This acquisition offers Kotak a deeper reach in the low income segment, and also increases the access of BSS’s customer base to Kotak’s wide array of products and services. Further, BSS’s loan book also qualifies for Priority Sector Lending (PSL). Kotak and the BSS team will leverage their combined experience to scale up the existing platform.
Narayan SA, President, Commercial Banking, Kotak Mahindra Bank, said that financial inclusion is one of the imperatives of our country, and this acquisition is a testimony of our commitment to cater to the needs of weaker sections of society in a commercially viable manner. The capabilities and processes required for this customer segment are unique, and cannot be created easily or organically in a short span. BSS is of the right size, culturally compatible with Kotak, and has proven its processes and value systems over a decade. He added that we will leverage BSS’s deep presence in the segment and related experience to ensure that customers’ needs are served best and consistent with the past culture.
Dr. Ramesh Bellamkonda, Promoter, Chairman & MD, BSS Microfinance Pvt. Ltd. Said that our institution has an excellent team, with good systems and processes. Until now, we have been hobbled with constraints of equity capital. The deal not only helps us overcome this constraint but also allows us to offer savings products in conjunction with Kotak Mahindra Bank, once the deal is consummated. We will now be able to expand, and provide better products and services to both existing and new clients across the country.