The merger of Shri­ram Trans­port Fi­nance and IDFC

Commercial Vehicle - - NEWS -

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.

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