Seeking RBI nod for reverse merger; promoter to stay in the business: Equitas SFB’s PN Vasudevan

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PN Vasudevan, the Managing Director and CEO of Equitas Small Finance Bank said that the company had sought RBI nod for the reverse merger as both the holding company and the Equitas Small Finance Bank were in the same line of business.

Equitas seeks to merge the holding company with the small finance bank. This decision came after the Reserve Bank of India (RBI) allowed small finance banks to apply for reverse mergers.
PN Vasudevan, the Managing Director and CEO of Equitas Small Finance Bank said that the company had sought RBI nod for the reverse merger as both the holding company and the Equitas Small Finance Bank were in the same line of business.
“We have been seeking approval from RBI to allow us to reverse merger with holdco and with the bank because the holdco and the bank carry out the same business, which is the underlying business of the bank,” Vasudevan said in an interview with CNBC-TV18.
“However, we have to create the holdco only to ensure certain compliance from a promoter perspective and the holdco does not have a promoter behind it, so it is a widely publicly held company,” he added.
As per RBI guidelines, the bank can apply after the completion of five years but it is seeking to apply prior to that to save some time, he further informed.
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Equitas will be applying to both RBI and the Securities and Exchange Board of India (SEBI).
“SEBI will be looking at the merger from a different set of guidelines. So we would be applying to both of them and once we get the approval from both then and will require shareholders’ approval and finally we will have to reach out to NCLT for their approval,” he said.
For the full interview, watch the accompanying video.

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