Utkarsh Small Finance Bank, on Wednesday, informed the exchanges that post passing a resolution for a reverse merger between the holding company Utkarsh Core Invest (UCL) and the bank, the UCL board has suggested initiating steps towards the same, subject to approvals from the concerned authorities.
“This is to inform that Utkarsh Small Finance Bank Limited (“USFBL” or “the Bank”) has received a communication from UCL dated February 14, 2024, stating that a resolution has been passed by the Board of Directors of UCL on February 13, 2024, whereby UCL has proposed to initiate steps in furtherance of a proposed reverse merger (‘Proposed Merger’) of UCL with the Bank, subject to receipt of requisite corporate, regulatory and statutory approvals and any other approvals as may be applicable, by each of UCL and the Bank.”
The reverse merger is proposed to fulfil the regulatory stipulation in the Reserve Bank of India’s guidelines on acquisition and holding of shares or voting rights in banking companies dated January 16, 2023, which requires the promoter to dilute their shareholding to 26 per cent within 15 years from the date of commencement of banking business which the company aims to achieve through the process.
The bank has said that it has taken note of the proposal and the Board of Directors of the lender will meet in due course and evaluate the proposal and other options to achieve regulatory compliance, taking into account the best interest of the Bank and its stakeholders.
The net profit of the lender rose by 23 per cent year-on-year (Y-o-Y) to Rs 116 crore in Q3FY24 and the net interest income (NII) stood at Rs 413 crore, 22.6 per cent higher from the year-ago period.