Navi Technologies, which owns and operates Chaitanya India Fin Credit, said on Tuesday that it would engage with the RBI to understand the reasons behind the rejection of its application for an on-tap universal banking licence. The management of the fintech will also consider if an appeal route needs to be pursued, Sachin Bansal, promoter of Navi Technologies, said at a press conference. Entities can file an appeal against the decision of the Central Board of Directors within a month, according to the guidelines.

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

Meanwhile, Navi Finserv (NFS), a wholly owned subsidiary of Navi Technologies, announced raising up to Rs 600 crore via public issue of non-convertible debentures (NCDs) for expanding its personal and home loans portfolios. The issue has a base size of Rs 300 crore and an option to retain over-subscription of another Rs 300 crore. The issue will open on May 23 and close on June 10. The secured NCDs will have two tenures – 18 months and 27 months – and will bear a coupon rate in the range of 9.20% to 9.75% per annum.

Navi Finserv offers personal loans and home loans. While personal loans have higher share in Navi Finserv’s disbursals, the company is also focusing on increasing its home loan portfolio. The IPO-bound Navi Technologies plans to infuse funds from the public listing into Navi Finserv. Navi Technologies plans to raise Rs 3,350 crore via fresh issue of shares. Of that, Rs 2,370 crore is to be infused in Navi Finserv.

Navi Finserv has total borrowings of Rs 2,506 crore and total assets under management of Rs 1,648 crore. The company claims that it has a lower non-performing asset ratio of 0.08% as it issues loans to borrowers with higher credit rating.

gThe upcoming NCD issue aims to raise funds for onward lending and financing purposes. This will further diversify our borrowing profile and add more retail investors to our portfolio to complement our wide base of institutional partners,” Ankit Agarwal, managing director of NFS, said.