RBL Bank raises its stake in Swadhaar Finserve to 100%

Private sector bank RBL Bank (formerly Ratnakar Bank) has hiked its stake in Swadhaar Finserve Pvt Ltd (SFPL), its business correspondent, to 100 per cent from the earlier 60.48 per cent, a move that will further help the lender expand its finance portfolio across geographies.

The 75-year old private sector bank, however, did not disclose the financial terms of the deal.
“The acquisition of the 100-per cent stake in Swadhaar FinServe is as per our stated intent and goes in line with our broad vision and strategy. We have been successful in expanding our inclusive finance portfolio by reaching the hinterlands of India and Swadhaar has been instrumental in this effort,” said Harjeet Toor, retail head, Inclusion and rural business, RBL Bank.
“The bank sees Swadhaar as a vehicle for becoming the market leader in the space of inclusive finance, especially catering to the under-served households and small businesses. In the future, we will also be looking to leverage Swadhaar’s growing branch network to offer other relevant products to customers in semi-urban and rural markets,” he added.
RBL Bank has brought the additional stake from marquee investors including Accion. 
SFPL works as a last-mile distributor of comprehensive financial services and products, particularly loans and savings products, to low-income households and micro enterprises across India.
Swadhaar’s reach – with a network of 331 branches across 16 states and 2 union territories – and transformation from an NBFC to a banking correspondent pioneered a way to reach underserved communities throughout the country. Today, the company has total assets under management (AUM) of about Rs2,000 crore and reaches 750,000 customers.
“Swadhaar was started with the objective of serving those who were unserved or under served by mainstream financial institutions, covering vulnerable households, micro and small enterprises. I believe this mission is best served under a bank’s umbrella. With the 100-per cent acquisition by RBL Bank we have achieved a most favourable outcome for our customers and employees. The strategy for this was chalked out two years ago and I am pleased at the smooth transition,” Veena Mankar, founder at Swadhaar Finserve said.
“Accion, our anchor investor since inception, has facilitated and supported this process. With RBL Bank’s focus on financial inclusion, our mission will not only be carried forward, but enhanced,” he added.
RBL Bank’s acquisition of SFPL is in line with its stated policy of strengthening its market position in this inclusive finance segment. SFPL and a few other select BC partners help RBL Bank in having a twin strategy of distribution, which is key towards having a diversified pan-India presence.