Home Press Release RBI Approves Merger of Fincare Small Finance Bank with and into AU Small Finance Bank

RBI Approves Merger of Fincare Small Finance Bank with and into AU Small Finance Bank

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RBI Approves Merger of Fincare Small Finance Bank with and into AU Small Finance Bank

  • All-stock merger with shareholders of Fincare SFB to receive 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB
  • Merger to Leverage Complementary Geographic Footprint and Product Basket, Creating a Pan-India Retail Banking Franchise

National, March 05, 2024: The Reserve Bank of India (RBI) today approved the merger of Fincare Small Finance Bank Limited (“Fincare SFB”) with and into AU Small Finance Bank Limited (“AU SFB”). This merger marks a significant milestone in the Indian banking sector, creating a formidable entity with a combined customer base of over 1 Crore, over 43,500 employees, and a network of over 2,350 physical touchpoints across 25 states and union territories, with deposit base of ₹ 89,854 Crore and Balance Sheet Size of ₹1,16,695 Crore as on December 31, 2023.

On October 29, 2023, the Board of Directors of both AU SFB and Fincare SFB had approved the merger, and the ‘Scheme of Amalgamation’ was later approved by their respective shareholders at their meetings on November 27, 2023, and November 24, 2023, respectively. On January 23, 2024, the proposed merger scheme also received the approval the Competition Commission of India (“CCI”) under the provisions of Section 31(1) of the Competition Act, 2002.

With the RBI’s approval, Fincare SFB will merge into AU SFB effective from 1st April 2024 and shareholders of Fincare SFB will receive shares of AU SFB in exchange for their shares in Fincare SFB at the approved share swap ratio. All employees of Fincare SFB will become part of the AU SFB family.

Commenting on the merger, Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, said, “We are extremely grateful to the Government of India and the Reserve Bank of India for reposing their faith in us. This merger will allow us to participate in our Honourable Prime Minister’s vision for the ‘Amrit Kaal’ and India’s dream of becoming a ‘Viksit Bharat’ by 2047. The approval adds further responsibility on us, as custodians of public trust, and we are committed to continue building a sustainable and inclusive Bank and empower the unserved and underserved segments of society to take part in India’s economic growth. Combining the complementary products and geographic footprints of both the banks will make us a true pan-India deposit and assets franchise, underscoring our commitment to financial inclusion and creating a more robust and efficient bank. We are excited about the opportunities it presents for growth and innovation and committed to delivering enhanced value and service to our customers and all stakeholders”.

Mr. Rajeev Yadav, MD & CEO of Fincare Small Finance Bank, added, “The merger with AU SFB marks a new chapter for our organization. It is a transformative merger between two successful and well-respected banks, both known for their industry-leading growth and profitability. We believe that by joining forces, with the synergy and complementary strengths of the two entities, we will be well-positioned to serve customers in a sustainable manner in the coming years. With an expanded product portfolio, wider market coverage, and a formidable blend of professional expertise and entrepreneurial spirit, the merged entity is poised to deliver exceptional value to its customers, a fulfilling and rewarding careers for all its employees and value augmentation for all our stakeholders.”

About AU Small Finance Bank

AU Small Finance Bank Limited (AU SFB) is a scheduled commercial bank and has established itself as the largest SFB in India since starting its banking journey in April 2017. Established in 1996 by Mr. Sanjay Agarwal, a first-generation entrepreneur, AU SFB boasts a 28 years-legacy with deep understanding of the rural and semi-urban markets and customer segments. The Bank operates a sustainable business model that facilitates credit to the unserved and underserved retail and MSME customer segments while providing complete banking solutions to its deposit and branch banking customers. As a tech-led Bank, AU has a strong digital presence with innovative products and services like 24X7 video banking, credit cards, personal loans, UPI QRs, payments, merchant lending, WhatsApp Banking, Chatbots etc. and its digital bank application AU0101 remains among the higher rated banking apps in India. 

The Bank operates from 1,049 banking touchpoints across 21 States & 3 Union Territories serving 46.8 Lac customers with an employee base of 28,904 employees. As on 31st Dec’23, the Bank has a net worth of ₹12,167 Crore, deposit base of ₹80,120 Crore, Gross Advance of ₹67,624 Crore and a Balance sheet size of ₹1,01,176 Crore. AU SFB enjoys the trust of marquee investors and is listed at both NSE and BSE. It has consistently maintained high external credit Rating and is presently rated ‘AA/Stable’ by CRISIL, CARE Ratings and India Ratings, while the Bank’s FD is rated ‘AA+/Stable’ from CRISIL Ratings.

About Fincare Small Finance Bank 

Fincare Small Finance Bank is a ‘digital-first’ small finance bank offering banking services through banking outlets, ATM, WhatsApp, Video Banking, Mobile Banking, Internet Banking and website Chatbots. The bank aims to transform banking through automated processes, instant account opening, and seamless transactions. Powered by technology, on one hand, Fincare Small Finance Bank caters to the banking needs of micro enterprises enabling their financial inclusion, and on the other, provides innovative banking services along with digital solutions to metro and urban customers. The Bank offer a comprehensive suite of financial products and services, ranging from savings account, fixed deposit, loans as well as digital banking solutions, designed to simplify banking and enhance convenience for customers.

Fincare Small Finance Bank commenced banking operations on 21st July 2017 under Section 22 of the Banking Regulation Act, 1949. It was included in the Second Schedule to the RBI Act, 1934 published in the Gazette of India dated April 13, 2019. As of December 31, 2023, Fincare Small Finance Bank’s Gross Loan Portfolio amounted to ₹13,352 Crore, while Deposits reached ₹9,734 Crore. The Bank efficiently caters to a customer base exceeding 59 Lakhs+, supported by a robust team of over 14,800 dedicated employees. With a widespread presence, the Bank boasts 1,303 touch points strategically located across 20 states and 3 Union Territories.

For more information, please visit the company’s website at www.fincarebank.com.

Website: www.aubank.in | Twitter: @aubankindia | Facebook: AU Small Finance Bank | LinkedIn: AU Bank

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