Sachin Bansal mulls options as RBI rejects bank request

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Navi Technologies, which owns and operates Chaitanya India Fin Credit, said on Tuesday that it would engage with the RBI to understand the reasons for the rejection of its application for a universal on-demand banking license. Fintech management will also consider whether an appeal route should be pursued, Navi Technologies promoter Sachin Bansal told a news conference. Entities can file an appeal against the decision of the central board of directors within one month, according to the guidelines.

Chaitanya India is a microfinance subsidiary of Navi Technologies. Chaitanya India is a non-banking finance company (NBFC) that provides loans to low-income women in rural and semi-rural areas. As of December 2021, assets under management of the company’s microfinance business stood at Rs 1,800 crore.

Meanwhile, Navi Finserv (NFS), a wholly owned subsidiary of Navi Technologies, has announced that it is raising up to Rs 600 crore through the public issuance of non-convertible debentures (NCDs) to expand its personal and home loan portfolios. The issue has a base size of Rs 300 crore and an option to keep the oversubscription of another Rs 300 crore. The show will open on May 23 and close on June 10. The secured NCDs will have two terms – 18 months and 27 months – and will carry a coupon rate of between 9.20% and 9.75% per annum.

Navi Finserv offers personal loans and home loans. While personal loans have a larger share of Navi Finserv’s disbursements, the company is also focused on increasing its home loan portfolio. Navi Technologies, linked to the IPO, plans to inject funds from the public listing into Navi Finserv. Navi Technologies plans to raise Rs 3,350 crore through a new equity issue. Of this, Rs 2,370 crore is to be infused into Navi Finserv.

Navi Finserv has total borrowings of Rs 2,506 crore and total assets under management of Rs 1,648 crore. The company says it has a non-performing asset ratio of less than 0.08% because it lends to borrowers with higher credit ratings.

gNCD’s upcoming issue aims to raise funds for lending and financing purposes. This will further diversify our borrowing profile and add more retail investors to our portfolio to complement our large base of institutional partners,” said Ankit Agarwal, Managing Director of NFS.

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