Mumbai: The Reserve Bank of India has approved the proposed merger of Fincare Small Finance Bank Ltd with AU Small Finance Bank Ltd, a little over four months after it was first announced.
“All branches of Fincare Small Finance Bank will function as branches of AU Small Finance Bank with effect from 1 April,” the RBI said on Monday.
AU Small Finance Bank had said in October it would bring Fincare Small Finance Bank into its fold in what would be the first merger of two such institutions. On 29 October, it said that the appointed date of the scheme would be 1 February 2024, or a date agreed to by both companies and approved by the RBI.
Under the merger agreement, shareholders of Fincare Small Finance Bank will get 579 equity shares of AU Small Finance Bank Ltd for every 2,000 fully paid-up equity shares they own.
These banks were set up under an RBI policy from 2014 that aimed to boost financial inclusion by providing an outlet for savings and by access to credit for small businesses, small and marginal farmers, micro and small industries, and other unorganised-sector entities.
While AU Small Finance Bank started operations in April 2017, Disha Microfin (which later became Fincare SFB after a merger with Future Financial Services) commenced operations in July 2017.
As of 31 December 2024, AU Small Finance Bank had assets totalling ₹1.01 trillion. While AU Small Finance Bank is a listed company, Fincare Small Finance Bank is not. Shares of AU Small Finance Bank closed at ₹579.8 on the BSE on Monday, up 0.34% from their previous close.
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