IndusInd Bank announces takeover of micro finance lender Bharat Financial
IndusInd Bank announced the takeover of micro finance lender Bharat Financial Inclusion Ltd in Mumbai on Saturday.
Chairman of the bank, R. Seshasayee, said the two boards met independently this morning and decided to go ahead.
It would help develop reach and would be a strong partnership. The two institutions had worked together for many years and were, therefore, comfortable with each other’s people and culture, he said.
P.H. Ravikumar, Chairman of Bharat Financial, said they believed margins were available only in two segments — the lower middle-class and the poverty line segments.
He drew attention to the irony that today was the seventh anniversary of the infamous Andhra Pradesh MFI Act, which created mayhem among MFIs.
Ramesh Sobti, Managing Director, IndusInd Bank, said Bharat Financial Inclusion would remain a wholly-owned subsidiary after the takeover. He assured that there would be no loss of jobs.
There would be plenty of synergies. The cost of funds would come down by 3 to 4 percentage points immediately.
Photo courtesy of Paul Falardeau.