Specifically, Karnataka Bank has signed a Memorandum of Understanding (MoU) with Northern Arc Capital and entered a collaboration that enables it to offer customer-centric financial solutions to retail borrowers. The nPOS, a technology platform by Northern Arc, focuses on co-origination, co-lending, and pool buy-out.
Its objective is to allow Karnataka Bank to establish seamless connections with multiple originators for various stages of the lending process, including loan origination, underwriting, disbursement, and collection. Additionally, the platform offers interactive dashboards, proactive nudges, and advanced reconciliation abilities.
The partnership aims to enable banks to digitally onboard various NBFCs, extend significant loan amounts, and expand their customer base through enhanced consumer outreach. In the company press release, officials from Karnataka Bank emphasised the strategic nature of the arrangement with Northern Arc. They highlighted the bank's focus on collaborating with multiple fintechs, with co-lending being a key area to grow the company's Advances book. The collaboration with Northern Arc is expected to assist Karnataka Bank in onboarding various NBFCs, extending its services beyond branch serving areas.
Officials from Northern Arc Capital expressed delight in partnering with Karnataka Bank for their digital transformation journey. The nPOS platform is intended to accelerate the bank's co-origination and co-lending partnerships with fintechs and NBFCs. This strategic alliance reflects Northern Arc Capital's commitment to facilitating credit for underserved and underbanked individuals and businesses, supporting innovation within the financial industry in the context of evolving regulatory and digital landscapes.
In January 2024, Karnataka Bank has announced its intention to issue equity share capital amounting to INR 7 billion (USD 84 million). Out of this, INR 1 billion will be allocated through a preferential issue, while the remaining INR 6 billion will be issued in one or more tranches through permissible means according to thehindu.com.
The same source reveals that, in October 2023, the bank successfully raised INR 8 billion through a preferential issue of equity shares. This move followed the approval granted by the Board of Directors on September 22, 2023, to raise equity capital up to INR 15 billion.
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