The Reserve Bank of India (RBI) has clarified that IDFC (Infrastructure Development Finance Company) Limited can exit as the promoter of IDFC First Bank Limited after the expiry of lock‐in period of 5 years which already ended on September 30, 2020.
- In this regard, the board will now consider the reverse merger between IDFC and the IDFC bank. For this, an application would be submitted to RBI for its approval.
- Besides, IDFC may also have to sell its mutual fund business, IDFC AMC (Asset Management Company) i.e. IDFC Mutual Fund.
Earlier this month RBI had allowed the holding companies of Equitas and Ujjivan Small Finance Banks to reverse merger with the bank.
RBI granted IDFC a banking license in April of 2014 pursuant to the February 2013 universal bank licensing guidelines. These guidelines mandated IDFC to create a non-operative financial holding company (NOFHC) structure to house the bank and other financial services units of the parent company to ensure the banking business was completely ring-fenced from other activities of the firm. IDFC was also mandated to hold a minimum of 40% stake in the ban, locked in for the first five years, and thereafter reduce it to 15% over ten years.
RBI imposes Rs 1 lakh penalty on Melur Co-operative Urban Bank, Madurai
RBI in exercise of powers vested in RBI under provisions of Section 47 A (1) (c) read with Section 46 (4) (i) and Section 56 of the Banking Regulation Act, 1949 (AACS- As Applicable to Cooperative Societies) imposed a monetary penalty of Rs 1 lakh on Melur Co-operative Urban Bank Ltd. located in Melur, Madurai District, Tamil Nadu for non-compliance with certain provisions of the directions issued by RBI.
- The action is not intended to pronounce upon the validity of any transaction or agreement entered into by the bank with its customers.
Recent Related News:
In June 2021, RBI imposed a monetary penalty of Rs.4 crore on Bank of India (BOI) and of Rs.2 crore on Punjab National Bank(PNB) for non-compliance of the directions.
About IDFC FIRST Bank:
Establishment– In 2018, by merging erstwhile IDFC Bank and former Capital First.
Managing Director (MD) & CEO (Chief Executive Officer)– V. Vaidyanathan
Headquarters– Mumbai, Maharashtra