RBI Approval: The Reserve Bank of India (RBI) on Monday approved the merger of Fincare Small Finance Bank and AU Small Finance Bank. After this, from April 1, 2024, all the branches of Fincare will work in the name of AU SFB. With this decision, the position of private sector AU Small Finance Bank will be further strengthened.
The merger was announced on October 30.
AU Small Finance Bank had announced its merger with Fincare Small Finance Bank on October 30, 2023. The bank had said that after getting approval from the shareholders, efforts will be made to get regulatory permission from RBI and Competition Commission of India.
AU Small Finance Bank said that the promoters of Fincare will invest capital of about Rs 700 crore after this merger. Under the deal, shareholders of unlisted Fincare will get 579 shares of listed AU SFB for every 2000 shares they hold.
Approval was received from Competition Commission on 23 January
After the merger of both the banks, Fincare SFB MD and CEO Rajeev Yadav will become the Deputy CEO of AU SFB. Also, Divya Sehgal, Director of the Board of Fincare SFB, will join the board of AU SFB. The merger of these two banks got approval from the Competition Commission of India on January 23 this year. AU SFB had given this information in the exchange filing.
Shares closed with a rise
The asset quality of AU Small Finance Bank had declined during the December quarter. In the third quarter of the current financial year, the total NPA of the bank was 1.98 percent. The bank’s net profit was also below expectations by Rs 375 crore. On Monday, shares of AU Small Finance Bank closed at Rs 579.50 with a rise of 0.26 per cent.
IIFL Finance banned from distributing gold loans
In another decision on Monday, RBI had banned IIFL Finance from distributing gold loans. The central bank has taken this action due to material supervisory concerns. However, the company will continue to service its existing gold loan portfolio.
