The Reserve Bank of India (RBI) has given its final approval to the Chennai-based Equitas Holdings Ltd, the holding company for the fifth-largest microlender in the country, to launch a Small Finance Bank (SFB).
Equitas Holdings is one of the 10 entities that received in-principle approval from the RBI in September last year to set up a SFB.
The proposed SFB, which will be named as Equitas Small Finance Bank, is expected to start operations by September or October, Business Standard reported citing P N Vasudevan, managing director, Equitas Holdings.
The company was listed on the exchanges in April. The public issue raised about Rs 2,170 crore. The capital it raised through the initial public offering was proposed to be used to develop IT infrastructure for the new bank and lending purposes, among others.
"Post the receipt of RBI licence and prior to commencement of the SFB business, a few other approvals are to be obtained from various departments of RBI and other agencies. On receipt of these approvals, Equitas Small Finance Bank will start operations," the report quoted Vasudevan as saying.
Equitas is a holding company and operates through three subsidiaries. The units are engaged in microfinance lending and also offer loans to micro and small enterprises besides mortgage and vehicle loans.
In June, Madras High Court had approved amalgamation of Equiatas Micro Finance and Equitas Housing Finance with Equitas Finance.
The proposed SFB will focus on four key strategies including offering existing range of credit products such as micro-finance and small enterprise loans for small commercial establishments, commercial vehicle finance and affordable housing finance.
With the conversion to a bank and expansion in the product and service offerings with inclusion of savings, deposits, remittance and third party products such as pension and insurance, the company expects to enhance its services to the low-income households.
Soon after the announcement, its shares jumped around 8% in the morning trade and were trading at Rs 184.1 a share, up 3.69%, at 12 PM on BSE in a strong Mumbai market.
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