Ujjivan Small Finance Bank and Equitas Holdings shares on Monday soared up to 15 per cent on NSE after the Reserve Bank of India (RBI) allowed small finance banks and respective holding companies to apply for mergers. Ujjivan Small Finance Bank shares were trading at Rs 32.25, up Rs 1.75  or 5.74%per cent, while it went on to hit day's high of Rs  33.80. Similarly, Equitas holdings stocks were trading at Rs 134.60 a piece, up Rs 19.40  or 16.84% per cent. Equitas Small Finance also missed 20 per cent upper circuit by nearly Rs 1.50 as it made day's high of RS 76.80 on NSE on Monday. Equitas Small Finance Bank Ltd stocks were trading at Rs 72.05 a piece, up Rs 6.90 or 10.59 per cent. 

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Ujjivan Small Finance Bank has announced that it will initiate steps for the amalgamation of the holding company, Ujjivan Financial Services with the bank. "We are pleased to inform you that RBI vide its letter dated July 09, 2021 has informed the Association of Small Finance Banks of India that it has decided to permit small finance banks and respective holding companies to apply for the amalgamation of holding company with small finance bank, in terms of provisions of Master Direction on Amalgamation of Private Sector Banks, Directions, 2016 dated April 21, 2016, 3 (Three) months prior to completing five years from the date of commencement of business of small finance bank. Accordingly, the Bank would be initiating necessary steps for the amalgamation of UFSL with the Bank in accordance with applicable laws and guidelines," said a regulatory filing BY Ujjivan SFB in BSE.  

Earlier, on Saturday, Equitas Holdings, the promoter of Equitas Small Finance Bank (SFB), had said the bank has received Reserve Bank of India's (RBI) nod to apply for amalgamation of the promoter into itself, reported news agency PTI 

As per the SFB licensing guidelines of RBI, a promoter of 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 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. 

Hence, the bank had requested RBI if a scheme of amalgamation of the 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, it said. 

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, it added.