IDFC Bank has signed a share purchase agreement with Tamil Nadu-headquartered microfinance institution Grama Vidiyal Micro Finance (GVMFL) for acquisition of 100 % equity share capital of GVMFL in an all-cash deal.a deal is estimated at nearly Rs 300 crore.

Grama Vidiyal will become wholly-owned subsidiary of the IDFC  bank after acquisition.This is a first-of-its-kind transaction where a bank has taken over a microfinance institution (MFI) and made it a subsidiary. Prior to this , the Bank had purchased 10% stake in Dhaka –based ASA internation in January for nearly Rs8.5 cr.

• Grama Vidiyal is the 5th-largest microfinance institution in India and has a customer base of 1.2 million.
• The acquisition will give the bank access to 12 lakh rural and semi-urban households and network of 319 locations across 65 districts of 7 states ,Tamil Nadu, Kerala, Karnataka, Pondicherry, Maharashtra, Gujarat and Madhya Pradesh. This will act as business correspondent of the bank
• GVMFL has over 3,000 employee ,with annual  profit 60cr, and has a loan recovery rate 99.99%.
  
• The 30-year old, Gramin Vidiyal has an asset under management of Rs 1,502 crore of micro finance assets,as of March 2016.it is known for its double bottom line approach , focusing on the sustainability of financial inclusion programmes and development of women .
• IDFC Bank already has 50 branches serving about 40,000 MFI customers and Grama Vidiyal customers would add to it.
• According to Rajiv Lall MD and CEO of IDFC Bank, the acquisition will help the bank reach out to those segments of customers that are usually not served by the banking system, besides transforming it into a mass retail bank.