The merger of AU Small Finance Bank and Fincare Small Finance Bank was approved by the Competition Commission of India (CCI) on January 23.
“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 merger involving amalgamation of Fincare Small Finance Bank with AU Small Finance Bank,” AU SFB stated in a regulatory filing on January 23.
The lender added that the Reserve Bank of India’s (RBI) approval of the scheme is still pending.
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Fincare SFB and AU SFB announced on October 30 that the two would join on February 1, 2024. The RBI and CCI’s regulatory approvals, the promoters of Fincare Small finance bank providing an investment of Rs 700 crores, and the consent of the shareholders of both Fincare SFB and AU SFB were among the crucial requirements that needed to be met for this deal to close.
The Managing Director & CEO of Fincare Small finance bank will become the Deputy CEO of AU SFB as a result of this merger. To further bolster the leadership group, Divya Sehgal, a current director on the board of Fincare SFB, will join the board of AU SFB.
With over 54 lakh customers overall, Fincare Small Finance Bank is a digitally enabled small finance bank that provides a wide range of deposit and asset solutions to its clients.
The management of AU Small finance bank and Fincare has highlighted the complementing branch footprint that will form a small finance bank across India as part of a complex strategic rationale for the merger. One major benefit is the portfolio diversification, which is facilitated by access to microfinance enterprises that focus on financial inclusion and rural areas.