RBI bars Equitas from open­ing new branches

The Times of India (New Delhi edition) - - Times Global - [email protected]

Mum­bai: The Re­serve Bank of In­dia (RBI) has taken ac­tion against Equitas Small Fi­nance Bank (ESFB) for fail­ing to meet the dead­line for get­ting its shares listed. The cen­tral bank has barred the lender from open­ing any new branches and has also frozen the salary of the CEO.

Equitas Bank re­ceived the fi­nal li­cence from the RBI in July 2016. One of the pre-con­di­tions was that the bank would get it­self listed within three years. “List­ing of SFBs within three years of reach­ing net worth of Rs 500 crore is manda­tory as out­lined in the guide­lines and as com­mu­ni­cated at the time of in-prin­ci­ple ap­proval,” the RBI said in a let­ter to the bank’s MD & CEO.

The cen­tral bank also warned that it may im­pose fur­ther re­stric­tions if the bank fails to make sat­is­fac­tory progress to­wards list­ing its shares. ESFB had sought extension of the time­line for list­ing of its shares. In its let­ter, the RBI said that the re­quest for list­ing of shares can­not be ac­ceded to.

Shares of Equitas are held by Equitas Hold­ings, which was listed on the stock ex­changes fol­low­ing an IPO in 2016. The hold­ing com­pany pro­mot­ers had ear­lier in­di­cated that they are look­ing at list­ing the bank by is­su­ing its shares to the hold­ing com­pany’s share­hold­ers.

In June, the RBI had im­posed a penalty of Rs 2 crore on Ko­tak Mahin­dra Bank for not com­ply­ing with its guide­lines on di­lu­tion of pro­mot­ers’ share­hold­ing in the bank.

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