RBI has issued a press release for this. According to this press release, this merger will be effective from April 1, 2024. This means that all branches of Fincare SFB will function as branches of AU SFB from April 1.

The central bank said the merger plan is one of the first such steps in the relatively new SFB sector. The Bank has been granted approval in exercise of the powers contained in sub-section (4) of Section 44A of the Banking Regulation Act 1949.

Last year, in October 2023, both the banks had announced the merger. The bank has set a target of RBI approval in February.

What will happen to the bank’s shares?

As per the agreement, shareholders of unlisted Fincare will get 579 shares of the listed AU SFB for every 2,000 shares they hold.

After the merger, FSFB shareholders will hold 9.9 per cent equity in AUSFB. After obtaining approval from RBI, the promoters of FSFB also agreed to infuse fresh capital of Rs 700 crore into the entity. When the bank announced this deal, there was uneasiness among the investors of AUSFB.

Fincare had announced that it can launch an IPO after this deal. Let us inform that after this merger, the total number of employees of AUSFB will exceed 15,000, which includes 10,000 employees in the MFI vertical.

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