Four months after the RBI gave in-principle approval to Centrum Financial Services to float a small finance bank (SFB), the RBI has granted the SFB license to the consortium of Centrum and BharatPe. The SFB promises to be India’s first pure digital small finance bank offering an open architecture experience to customers.To understand a bit of background, the consortium of Centrum Financial Services and BharatPe had expressed their interest in acquiring PMC Bank. The cooperative bank board had been superseded by the RBI after PMC bank had teetered on the verge of default. However, RBI insisted that Centrum should first seek an SFB license to take over PMC Bank.The SFB floated by Centrum and BharatPe will be called the Unity Small Finance Bank. It will start operations with a small loan book of Rs.1,500 crore and will take over the assets and liabilities of the beleaguered PMC Bank. Centrum Financial is listed on the BSE and is headed by former Standard Chartered India head, Jaspal Bindra. He will also drive the SFB.The Unity SFB plans to become operational before the end of 2021 as a pure digital only bank. To begin with, Centrum will merge its SME lending portfolio and its micro credit portfolio into the portfolio of Unity SFB for a consideration of Rs.426 crore. These businesses are currently being run by two subsidiaries of Centrum.Apart from Centrum Financial, BharatPe will also move its loan assets and integrate them into the overall loan book of Unity SFB. In addition, Centrum Financial Services and BharatPe have also jointly decided to infuse capital to the tune of Rs.1,800 crore into Unity SFB to ensure that the small finance bank is adequately capitalized. To begin with, the big challenge for Unity SFB will be to integrate the operations of PMC Bank. The cooperative bank has total deposits of Rs.10,727 crore, total advances of Rs.4,473 crore and gross NPAs of Rs.3,519 crore. Withdrawal of deposits from the bank have been under RBI restrictions since September 2019.The Unity SFB is likely to have a strong board with former SBI Chief, Rajneesh Kumar taking over at the helm of BharatPe. However, the real battle for Unity SFB may have just about begun.