Equitas Small Finance Bank and its parent Equitas Holdings Ltd announced on Friday that the Reserve Bank of India has issued its no-objection to their merger application, subject to conditions.
In exchange filings, they said, "We would like to notify that RBI has expressed its no-objection to our application for voluntary amalgamation of EHL (Equitas Holdings Ltd) with ESFB (Equitas Small Finance Bank) in its letter dated May 6, 2022." The RBI's no objection comes with conditions. The merger is being carried out to comply with RBI small finance bank regulations, which require the promoter to cut his or her stake in the subsidiary to 40% within five years of the SFB's start-up (Small Finance Bank).
Equity shares of SFBs should be listed on recognised stock exchange(s) within three years of the date the SFB's net worth reaches Rs 500 crore, according to RBI requirements laid down for SFBs in June 2016 and guidelines for licencing SFBs in the private sector in November 2014. The applicable date for listing in the case of ESFB was September 4, 2019. It began banking activities, however, with a net worth of more over Rs 500 crore.
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