The board of Ujjivan Financial Services has approved the amalgamation of the company with its subsidiary, Ujjivan Small Finance Bank (USFB). This decision has been taken to meet the public shareholding norms of SEBI (Securities and Exchange Board of India).
- Under this amalgamation Ujjivan Financial Services will be a transferor company and Ujjivan SFB is a transferee company.
Ujjivan Financial Services is the holding company and promoter of Ujjivan SFB. It currently holds 83.32% of the equity shareholding and 100% of preference shareholding of Ujjivan SFB.
- After this amalgamation, shareholding of public shareholders of Ujjivan SFB will increase from 68% to 100%. It is subject to approvals from Reserve Bank of India (RBI), SEBI, NCLT (National Company Law Tribunal) and public shareholders of the company.
What are the shareholding norms?
As per the minimum shareholding norms, the promoter’s minimum initial contribution in the SFB arm should be at least 40%. If the promoter’s initial shareholding in the SFB is in excess of 40%, then it is to be brought down to 40% within a period of five years from the date of commencement of operations of SFB.
- Now, this period of five years is expiring on January 31, 2022 for Ujjivan SFB. It was established in 2017.
Aftermath of Amalgamation:
Once the scheme comes to effect, Ujjivan SFB would issue and allot to the shareholders of Ujjivan Financial Services 115 equity shares of the bank for every 10 equity shares of Ujjivan.
- The amalgamation will create a larger and stronger entity with better administration and reduced cost.
Recent Related News:
The board of Ujjivan Small Finance Bank (SFB) appointed Carol Furtado as an ‘officer on special duty (OSD)’ till September 30, 2021. This decision has been taken after the resignation of the bank’s MD (Managing Director) and CEO Nitin Chugh.
About Ujjivan Small Finance Bank (SFB):
Chief Executive Officer (CEO)– Sanjeev Barnwal
Tagline– Build a Better Life
Headquarter– Bengaluru, Karnataka