The Competition Commission of India (CCI) on January 23 gave approval for the merger between AU Small Finance Bank and Fincare Small Finance Bank.
"Competition Commission of India (CCI) vide its letter dated January 23, 2024 has communicated that CCI in its meeting held on January 23, 2024, considered and approved the proposed combination involving amalgamation of Fincare Small Finance Bank with AU Small Finance Bank," AU SFB said in a regulatory filing on January 23.
The lender further said that the scheme remains subject to receipt of the approval of the Reserve Bank of India (RBI).
AU SFB on October 30 announced that Fincare SFB will merge with the bank from February 1, 2024. The completion of this transaction was subject to several critical conditions, including approval from the shareholders of both Fincare SFB and AU SFB, regulatory nods from the RBI and the CCI, and a capital infusion of Rs 700 crores by the promoters of Fincare SFB.
As part of this merger, the Managing Director & CEO of Fincare SFB will become the Deputy CEO of AU SFB. Additionally, Divya Sehgal, a current director on Fincare SFB's board, will join AU SFB's board, further strengthening the leadership team.
Fincare Small Finance Bank, a digitally enabled small finance bank, offers a broad range of deposit and asset solutions to its customers, with a total customer base of approximately 54 lakh.
The merger between AU SFB and Fincare has a multifaceted strategic rationale, with the management highlighting the complementary branch footprint that will establish a small finance bank across India. The portfolio diversification, especially through access to rural and financial inclusion-focused microfinance businesses, is regarded as a significant advantage.
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