Equitas board approves merger of holding company with bank

2 years ago 291

ESFBL had, in July 10, clarified that the Reserve Bank of India (RBI) had permitted the Chennai-headquartered bank to apply to the banking regulator for the approval of its amalgamation scheme, which would facilitate the merger of promoter entity EHL with the bank.

Both EHL and Equitas Small Finance Bank are listed on the stock exchanges and EHL holds a 81.98 % stake in the bank.

The board of directors of Equitas Small Finance Bank (ESFBL) has approved a scheme of amalgamation of Equitas Holdings (EHL ) with ESFBL. The scheme is awaiting approvals from the Reserve Bank of India and Sebi. EHL is the holding company of the ESFBL.

Upon the scheme’s coming into effect, each of the equity shareholders of EHL would be allotted 226 equity shares of Rs 10 each, credited as fully paid up of ESFBL, in respect of every 100 equity shares.

ESFBL had, in July 10, clarified that the Reserve Bank of India (RBI) had permitted the Chennai-headquartered bank to apply to the banking regulator for the approval of its amalgamation scheme, which would facilitate the merger of promoter entity EHL with the bank.

In accordance with the RBI small finance bank licensing guidelines and the RBI clarification issued on January 1, 2015, a promoter of small finance bank can exit or cease to be a promoter after the mandatory initial lock-in period of five years, depending on the RBI’s regulatory and supervisory comfort and Sebi regulations in this regard at that time.

In the case of ESFB, the said initial promoter lock-in expires on September 4, 2021, and the bank had requested RBI if a scheme of amalgamation of the promoter and holding company (EHL) with the bank, resulting in the exit of the promoter, could be submitted to the RBI for approval, prior to the expiry of the five years.

Both EHL and Equitas Small Finance Bank are listed on the stock exchanges and EHL holds a 81.98 % stake in the bank.

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