Equitas Holdings — the promoter of Equitas Small Finance Bank — said that the bank has received the Reserve Bank of India’s (RBI) approval to apply for amalgamation of the promoter into itself.
As per the SFB licensing guidelines of RBI, a promoter of an SFB can exit or 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 the 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,” Equitas Holding said in a regulatory filing on Saturday.
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 added.
“The 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.
The central bank 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, the promoter company 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,” it said.
Equitas SFB’s IPO was subscribed 1.95 times and its shares were listed in November 2020.