Karnataka Bank (KBL), a premier private sector bank, and Northern Arc Capital Limited (“Northern Arc”), a leading diversified non-banking financial company (NBFC) and financial services platform in India, have entered into a Memorandum of Understanding (MOU). This collaboration is set to revolutionize Karnataka Bank’s offerings by providing customer-centric financial solutions to retail borrowers through Northern Arc’s innovative technology platform, nPOS.

The nPOS platform, designed for co-origination, co-lending, and pool buy-out, aims to enable Karnataka Bank to efficiently connect with multiple originators for loan origination, underwriting, disbursement, and collection. It features interactive dashboards, proactive nudges, and advanced reconciliation abilities, enhancing the bank’s capability to digitally onboard various NBFCs. This arrangement is anticipated to significantly expand Karnataka Bank’s lending capabilities and customer base due to the improved consumer outreach facilitated by these NBFC partnerships.

Srikrishnan H, Managing Director & CEO of Karnataka Bank, highlighted the strategic nature of this arrangement: “Karnataka Bank’s arrangement with Northern Arc through the nPOS platform is very strategic considering our aspirations to partner with multiple Fintechs. We are focusing on co-lending to grow our Advances book. The relationship with Northern Arc will assist us in onboarding various NBFCs and ensuring last mile integration beyond our branch serving areas.”

Ashish Mehrotra, CEO & MD of Northern Arc Capital, expressed enthusiasm about the partnership: “We are delighted to partner with Karnataka Bank in their digital transformation journey. The nPOS platform will enable the bank to accelerate its co-origination and co-lending partnerships with Fintechs and NBFCs. This strategic alliance underscores our commitment to facilitating credit to underserved and underbanked individuals and businesses.”

Sekhar Rao, ED of Karnataka Bank, added: “This collaboration aims to enhance digital lending, risk management, and financial inclusion, and provide customers with innovative solutions. We look forward to delivering a seamless experience through this strategic alliance.”

The agreement, exchanged in Bengaluru, marks a significant milestone in banking technology and financial inclusion, with the potential to drive innovation within the financial industry.

The partnership between Karnataka Bank and Northern Arc Capital using the nPOS platform is a significant development in India’s banking sector. It exemplifies how traditional banks are embracing digital transformation to improve financial inclusion and extend services beyond conventional boundaries. This strategic alliance is likely to set a precedent in the banking industry, showcasing the potential of technology-driven solutions in enhancing customer experiences and expanding financial services reach.

  Ashish Mehrotra, Banking industry news, Digital Lending, India, Karnataka Bank, Northern Arc Capital, Sekhar Rao, Srikrishnan H