Indian private sector lender Kotak Mahindra Bank has agreed to acquire 99.49% of BSS Microfinance from existing shareholders in a cash deal worth INR1.39bn ($21m).

Bangalore-based microlender BSS would become a subsidiary of the bank following the completion of the deal.

The transaction will help Kotak to foray into the microfinance space by giving it access to the microfinance lender’s customer base of over 2,17,000 and its network of 78 branches.

At the end of 30 June 2016, BSS had microfinance loans of INR4.83bn in its books and a net worth of INR730m.

The deal has already secured the nod of Kotak’s board of directors, and is now subject to regulatory approvals.

The latest deal marks the second purchase by Kotak in less than two years. In November 2014, the bank agreed to acquire private sector lender ING Vysya in a share-swap deal.

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By GlobalData