 "Merger and acquisition")
AU Small Finance Bank (AU SFB) on Monday amalgamated Fincare Small Finance Bank (Fincare SFB), marking the first such consolidation in the sector.
In an all-stock merger deal first announced on October 29, 2023, where the shareholders of Fincare SFB received 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB, the merger received final approval from RBI on March 4, 2024, with the effective date of April 1, 2024.
The merger is also expected to provide AU SFB with enhanced access to South India, significantly expanding its distribution network, the Jaipur-based lender said in a statement.
This increased presence will facilitate the distribution of the bank's diverse range of products and services to a wider customer base, strengthening its market position in the region, it said.
With this, it said, AU SFB has a franchise with a combined base of about 10 million customers, 43,500 employees, and a network of 2,350 physical touchpoints across 25 states and union territories, having a deposit base of Rs 89,854 crore and a balance sheet size of Rs 116,695 crore.
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The focus now shifts to ensuring a smooth and seamless integration within the next 9-12 months and delivering exceptional banking services and value to the customers, it said.
To ensure seamless transition and minimal customer disruption due to the merger, both tech-led banks with strong customer orientation have established a dedicated task force and equipped their call centres to answer all customer queries.
"This merger represents not just the amalgamation of two entities, but the convergence of our shared vision to redefine banking excellence in India. I would like to thank the Government of India and the Reserve Bank of India and all other regulatory authorities for their blessings and expeditious approval process," AU Small Finance Bank MD and CEO Sanjay Agarwal said.
RBI granted a licence to ten entities to set up Small Finance Banks to provide basic banking services to small farmers and micro industries in 2015.
Following the grant of licence by the regulator, this is the first merger and acquisition that has taken place.
As part of the financial inclusion drive, the Small Finance Banks are created to provide basic banking services like accepting deposits and lending to the unbanked sections such as small farmers, micro business enterprises, micro and small industries and unorganised sector entities.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
