RBI rejects Equitas’ extension request for listing deadline

Equitas Holdings’ proposal, seeking extension of the listing deadline for its subsidiary Equitas Small Finance Bank, have been turned down by the RBI. The RBI has also ordered freezing of the small finance bank’s chief executive’s remuneration at the existing level.
The RBI has said, “Request for extension of timeline for listing of share of ESFB cannot be acceded to.” In addition, Equitas was also not permitted to open new branches. Further restrictions may be imposed in case the bank fails to make satisfactory progress towards listing of its shares.

“Listing of small finance banks (SFBs) within three 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,” said the RBI letter. The company, previously this yea, said that it would list the bank without an initial public offering (IPO) by giving its existing shareholders a direct 47% stake in the small finance bank. Since the announcement of this scheme, the stock has lost 8%.