Equitas gets RBI nod to apply for amalgamation of promoter into itself

PTIUpdated: Saturday, July 10, 2021, 06:02 PM IST
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The Reserve Bank (RBI) has been conducting the OBICUS of the manufacturing sector on a quarterly basis since 2008. | Photo Credit: PTI

Equitas Holdings, the promoter of Equitas Small Finance Bank (SFB), on Saturday said the bank has received Reserve Bank of India’s (RBI) nod to apply for amalgamation of the promoter into itself.

As per the SFB licensing guidelines of RBI, a promoter of SFB can exit or to cease to be a promoter after the mandatory initial lock-in period of five years (initial promoter lock-in) depending on RBI's regulatory and supervisory comfort and SEBI regulations at that time.

"In case of Equitas Small Finance Bank (the bank), our subsidiary for which the company is the promoter, the said initial promoter lock-in for the company expires on September 4, 2021," it said in a regulatory filing.

Hence, the bank had requested RBI if a scheme of amalgamation of the company with the bank, resulting in exit of the promoter, can be submitted to RBI for approval, prior to the expiry of the said five years, to take effect after the initial promoter lock-in expires, it said.

"RBI vide its communication dated July 9, 2021, to the bank has permitted the bank to apply to RBI seeking approval for scheme of amalgamation," Equitas Holdings said.

RBI has also conveyed that any ''no objection'', if and when given on the scheme of amalgamation, would be without prejudice to the powers of RBI to initiate action, if any, for violation of any licensing guidelines or any terms and conditions of license, or any other applicable instruction, it added.

"Accordingly, we would be initiating steps to finalise the scheme of amalgamation, submit to the boards of the company and the bank for approval, and take further action thereafter in accordance with applicable regulations and guidelines," Equitas Holdings said.

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