Fincare SFB and AU Small Finance Bank (AU SFB) are both going to merge into a single bank. The merger was announced on October 29, 2023, and is subject to regulatory approvals. If the merger is approved, it is expected to be completed in February 2024.
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| Bank merge FINCARE SFB,(AU SFB) |
The merger will create a larger and more diversified
Small finance bank with a stronger presence in both northern and southern India. It will also give the merged bank a stronger position in the microfinance segment.
The share exchange ratio for the merger is 579 equity shares of AU SFB for every 2,000 equity shares of Fincare SFB. This means that shareholders of Fincare SFB will own approximately 9.9% of the merged entity.
The merger is expected to benefit customers of both banks by giving them access to a wider range of products and services, as well as by improving the efficiency and competitiveness of the merged bank.
Here are some of the potential benefits of the merger,
Increased scale and reach: The merged bank will have a larger customer base and a wider network of branches, which will make it more accessible to customers.
Enhanced product and service offerings: The merged bank will be able to offer a wider range of products and services to customers, including both microfinance and commercial loans.
Improved efficiency and competitiveness: The merged bank will be able to achieve economies of scale and improve its efficiency, which will make it more competitive.
The merger will require the approval of the two banks' shareholders, RBI and CCI (Competition Commission of India). After approval, Fincare Small Finance Bank (Fincare SFB) and AU Small Finance Bank (AU SFB) will be merged. The company will acquire Fincare Small Finance Bank in an all-equity transaction valued at Rs 4,411 crore.
Overall, the merger of Fincare SFB and AU SFB is a positive development for the small finance banking sector in India. It is expected to create a stronger and more diversified bank that will be better able to meet the needs of its customers.