Kotak Mahindra Bank announced that it has executed binding share purchase agreement to acquire 99.49% of equity shares of BSS Microfinance Private Limited (BSS).

BSS Microfinance is 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 networth 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.

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 "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."

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