The Reserve Bank of India has conveyed its “no objection” to the merger of Equitas Holdings Ltd (EHL) with Equitas Small Finance Bank (ESFBL).
“We would like to advise that RBI, in its letter dated May 6, 2022, conveyed its ‘no objection’ to our proposed voluntary merger of EHL with ESFBL,” the bank said in a filing on Friday.
The merger will be subject to a number of conditions, including that EHL will have to sell its stake in its subsidiary, Equitas Technologies P Limited before the plan comes into effect.
Equitas SFB is also expected to seek RBI approval to bring Equitas Development Initiatives Trust (EDIT) and Equitas Healthcare Foundation (EHF) under its umbrella before the scheme comes into effect.
The bank said any investor who will acquire or hold a stake of five per cent or more in ESFBL upon the merger taking effect will need to seek prior approval from the RBI under the applicable RBI regulations within one month. months from the date of the letter.
“Until they are deemed ‘fit and proper’ by RBI, their voting rights in ESFBL will be limited to less than five percent of the total voting rights of ESFBL shareholders,” he said. added.
The merger plan will also need to be approved by majority shareholders and creditors, will require NCLT clearance and will need to comply with regulatory standards.
An audited balance sheet of the ESFBL as of the effective date of the scheme shall be submitted to RBI within two months from the date after verifying compliance with the prescribed accounting policies and standards.
“RBI also advised that the non-objection should not be taken as granting an exemption to any of RBI’s regulatory requirements and that any deviations from existing regulatory instructions should be researched separately and that RBI may impose additional conditions. it deems appropriate,” added Equitas SFB.
The Board of Directors of Equitas SFB had, on March 21 this year, approved the merger plan between the bank and Equitas Holdings.
May 06, 2022