Kotak Mahindra Bank today announced it is acquiring Karnataka-focused BSS Microfinance for Rs 139.2 crore in an all cash deal, which would enable the private sector lender to enter the high-growth microlending segment.

"The only constraint for BSS was capital, which will not be a problem now. The systems, management team and low NPAs are positives. We will expand the business into newer geographies and products," KMB's President for commercial banking Narayan SA told reporters here.

The acquisition follows its Rs 15,000 crore colaboration with ING Vysya Banklast year, and also a similar move by smaller rival IDFC Bank, which snapped up Grama Vidiyal Microfinance in July 2016.