The merger of Shriram Transport Finance and IDFC
Shriram Transport Finance Company (STFC) and IDFC Group are said to in talks for a merger. Sources claim that the managments of the two companies are working on the details, and would seek the requisite approvals from various regulators overseeing banking, insurance, and capital markets. Sources also point at the need to seek Reserve Bank of India (RBI) permission. On previous occassions, RBI is known to express a view that banks cannot undertake any business activity through a separate entity that can be done within the bank. The RBI is unlikely to allow a non-bank financial institution alongside a bank. Much would also depend on the role of STFC within the larger IDFC Group; the potential synergies that STFC may derive in case of the merger.