RBI Permits HDFC To Maintain Solely 9.9% In Bandhan Financial institution – BloombergQuint

RBI Permits HDFC To Maintain Solely 9.9% In Bandhan Financial institution – BloombergQuint

The Reserve Financial institution of India didn’t enable Housing Growth Finance Company Ltd. to personal greater than the regulatory restrict in Bandhan Financial institution Ltd.

India’s largest mortgage lender, which has agreed to merge its low-cost arm Gruh Finance Pvt. Ltd. with Bandhan Financial institution, can maintain 9.9 % within the financial institution, based on its change submitting. That’s the utmost a non-banking finance firm can personal in a non-public financial institution. HDFC had sought approval for 14.96 %.

HDFC agreed to merge Gruh Finance with microlender-turned-universal financial institution in a share-swap deal. Shareholders of Gruh Finance will get 568 shares of Bandhan Financial institution for each 1,000 held.

HDFC owns 57.83 % in Gruh Finance. It had agreed to pare that in change for 14.96 % possession in Bandhan Financial institution.

The deal, introduced in January, got here after the RBI penalised promoters of Bandhan Financial institution for not with the ability to scale back their stake beneath the regulatory cap. Promoters maintain 82.28 % within the non-public financial institution, which is anticipated to come back all the way down to round 61 % after the merger.

On the time of announcement, Bandhan Financial institution had mentioned the deal was a part of a broader plan to diversify its mortgage ebook. The merger with Gruh Finance would carry down loans to the unsecured phase from 86 % to 50 % of whole advances, Chandra Shekhar Ghosh, managing director and chief government officer at Bandhan Financial institution, had mentioned.

HDFC mentioned in its submitting that the deal continues to be pending different statutory approvals.