The Reserve Bank of India approved the merger of Fincare Small Finance Bank Ltd and AU Small Finance Bank Ltd, which was first disclosed just over four months ago.
“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.
In October, AU Small Finance Bank announced that it would merge with Fincare Small Finance Bank, marking the first time two such organisations would combine. On October 29, it announced that the scheme’s effective date would be February 1, 2024, or a date agreed upon by both firms and approved by the RBI.
According to the merger agreement, Fincare Small Finance Bank shareholders would receive 579 equity shares in AU Small Finance Bank Ltd for each 2,000 fully paid-up equity shares they own.
These banks were founded in 2014 as part of an RBI policy aimed at expanding financial inclusion by providing a savings channel as well as access to loans for small businesses, small and marginal farmers, micro and small enterprises, and other unorganised sector groups.
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While AU Small Finance Bank began operations in April 2017, Disha Microfin (later renamed Fincare SFB following its merger with Future Financial Services) began operations in July 2017.
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