July 10, 2021
In accordance with Paragraph 8 of RBI Small Finance Bank Licensing Guidelines (“SFB Licensing Guidelines”) dated November 27, 2014 read with RBI clarification to Query No 101 on the SFB Licensing Guidelines issued on January 1, 2015, a promoter of Small Finance Bank (SFB) can exit or to cease to be a promoter after the mandatory initial lock-in period of five years (“Initial Promoter Lock-in”) depending on the RBI’s regulatory and supervisory comfort and SEBI Regulations in this regard at that time.
In case of Equitas Small Finance Bank Limited (“the Bank”), the said Initial Promoter Lock-in expires on September 4, 2021. Hence, the Bank had requested RBI if a Scheme of Amalgamation of the promoter and holding company, Equitas Holdings Limited (“EHL”), with the Bank, resulting in exit of the promoter, could 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.
RBI vide its communication dated July 09, 2021 has permitted the Bank to apply to RBI, seeking approval for Scheme of Amalgamation. RBI 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.
Accordingly, we would be initiating steps to finalise the Scheme of Amalgamation, submit to the Boards of the Bank and EHL for approval and take further action thereafter in accordance with applicable regulations and guidelines.
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