Equitas Holdings, the promoter of Equitas Small Finance Bank (SFB), said the bank has received Reserve Bank of India’s (RBI) nod to apply for amalgamation of the promoter into itself.
Similarly, the green signal from the banking regulator has paved the way for Ujjivan Financial Services, which is likely to be unified with the Ujjivan Small Finance Bank.
Shares of Ujjivan Financial Services and Equitas Holdings surged 20 per cent each, their daily circuit limits, to Rs 244.90 and Rs 138.40, respectively, on Monday. BSE Sensex was trading 0.38 per cent higher at the time of writing this report.
As per the SFB licensing guidelines of RBI, a promoter of 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 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,” it said in a regulatory filing.
The bank had requested RBI if a scheme of amalgamation of the promoter 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.