IDFC (Infrastructure Development Finance Company) Limited and IDFC Financial Holding Corporation Limited (Promoter Group) will be merged into private sector bank IDFC First Bank.
IDFC (Infrastructure Development Finance Company) Limited and IDFC Financial Holding Corporation Limited (Promoter Group) will be merged into private sector bank IDFC First Bank. The board of IDFC First Bank has given approval for this merger. The bank informed about this decision of the board on Thursday. According to the regulatory filing, a meeting of the bank’s board of directors was held on December 30 in which the proposal for merger of IDFC and IDFC Financial Holding with IDFC First Bank was considered and the board agreed with this proposal. However, the information regarding the merger has not yet been revealed on the timeline.
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Board constituted committee for merger
In the regulatory filing, the bank has said that it is in principle in favor of the merger and it will have to take statutory and regulatory approvals from the board of directors, shareholders, creditors and others. Out of this the approval of the Board of Directors has been obtained. The private sector bank has informed that the board has authorized and constituted a committee for this merger. The Capital Raise and Corporate Restructuring Committee has been constituted to decide the conditions for the proposed merger. This includes completion of the plan, valuation, hiring of consultants, etc.
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RBI gave exit nod to IDFC in July
The central bank Reserve Bank of India (RBI) in July this year (2021) approved the exit of IDFC Limited as the promoter of IDFC First Bank. The RBI had given this approval because the five-year lock-in period of IDFC as a promoter has expired and it paved the way for a reverse merger between the two companies. IDFC is the leading finance company of the country. IDFC holds 100 per cent stake in IDFC Financial Holding and 36.52 per cent (as per data available as of September 2021) in IDFC First Bank.
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