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RBI rejects Equitas’ plea for listing deadline extension

The Reserve Bank of India has rejected a to extend the listing deadline for Equitas Small Finance Bank and ordered the bank to freeze the remuneration of the chief executive at the existing level. RBI told bank that its request for extension of timeline for listing of share cannot be acceded to.  It also told the bank that it cannot open new branches and that the central bank may impose further restrictions if the bank fails to make satisfactory progress towards listing of its shares. An RBI  letter to the stock exchanges detailing the measures said listing of small finance banks within 3 years of reaching net worth of Rs 500 crore is mandatory as outlined in the guidelines for licensing of SFBs and as communicated to the bank at the time of granting of ‘in-principle’ approval and granting of license, thereafter. The bank’s parent company, Equitas Holdings, had told the RBI earlier this year that it would list the bank without an IPO by giving its existing shareholders a direct 47% stake in the bank. Under the scheme, the parent company has proposed to capitalize free reserves of the bank and issue shares of the subsidiary to its shareholders without cash consideration.

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