OakNorth Bank has secured a £66m investment from India’s largest non-bank SME lender.

Indiabulls Group, founded 15 years ago by Sameer Gehlaut, has taken a 40% stake in the challenger bank, allowing OakNorth to bring forward its investment plans.

Rishi Khosla, CEO and Co-Founder of OakNorth Bank, said: “This is a massive vote of confidence in OakNorth, and this major investment will enable us to accelerate and expand our ambitious growth plans to take on the major banks’ ‘computer says no’ approach to small business lending.

“The UK economy needs a more diverse and competitive banking sector; British entrepreneurs and business owners have been held back by traditional banks’ preferences to lend to larger companies and to require property as collateral.

“We’re tearing up that rule book and taking a new approach based on understanding our customers’ businesses and lending according to their needs.”

OakNorth was founded by Rishi and Joel Perlman, who felt compelled to launch the lender after the challenges they faced when trying to secure finance from the high street banks.

Sameer Gehlaut, Chairman and Founder of Indiabulls Group, said: “There’s a major opportunity in UK banking and we believe the OakNorth proposition fills a significant gap in the market.

“It is the most exciting bank to have launched in Britain since the barriers to entry were reduced.

“Many banks have called themselves ‘challengers’, but actually operate just as the big banks do, only smaller and with fewer economies of scale.

“OakNorth has a strong niche that is fundamentally important to the UK economy, is genuinely disruptive, and has useful synergies with a part of our business that is also focused on lending to small companies.”