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The Reserve Bank of India has conveyed its ‘no-objection’ to the amalgamation of Equitas Holdings Ltd (EHL) with Equitas Small Finance Bank (ESFBL).
“We would like to inform that RBI, vide its letter dated May 6, 2022, has conveyed its ‘no-objection’ to our proposal for voluntary amalgamation of EHL with ESFBL,” the bank said in a stock exchange filing on Friday.
The amalgamation will be subject to a number of conditions, including that EHL shall divest its shareholding in its subsidiary, Equitas Technologies P Limited prior to scheme taking effect.
Equitas SFB would also have to seek RBI approval to bring Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF) under its ambit prior to scheme taking effect.
The bank said any investor which will be acquiring or holding five per cent or more shareholding in ESFBL upon the amalgamation taking effect will be expected to seek prior approval of the RBI under applicable RBI regulations within one month from the date of the letter.
“Till they are found by RBI to be ‘fit and proper’, their voting rights in ESFBL will be restricted to less than five per cent of the total voting rights of shareholders of ESFBL,” it further said.
The scheme of amalgamation will also need to be approved by majority shareholders and creditors, and will require clearance from the NCLT and will have to comply with regulatory norms.
An audited balance sheet of ESFBL as on the effective date of the scheme will have to be submitted to RBI within two months from the date after ensuring compliance with prescribed accounting policies and standards.
“RBI has also indicated that the No-objection shall not be treated as granting exemption from any of the regulatory requirements of RBI and that any deviation from the existing regulatory instructions would have to be sought separately and that RBI may impose additional conditions that it deems appropriate,” Equitas SFB added.
The board of Equitas SFB had on March 21 this year had approved the scheme of amalgamation between the bank and Equitas Holdings.
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