AU Small Finance Bank and Fincare Small Finance Bank merger: How it is likely to impact you
AU Small Finance Bank and Fincare Small Finance Bank have approved an all-stock merger of the two financial institutions. According to a press release by the banks, the merger is subject to the approval of shareholders of AU SFB and Fincare SFB respectively, Reserve Bank of India under the Banking Regulation Act and the Competition Commission of India.
Upon obtaining the required approvals, Fincare SFB shall merge into AU SFB.
According to a PTI news report, «Fincare is poised to amalgamate into AU Small Finance Bank (AU SFB), with the merger slated to take effect from February 1, 2024, subject to requisite approvals.»
According to the press release issued by the banks, «The merger aids diversification of AU SFB's portfolio with addition of rural, inclusion focused microfinance, mortgages, and gold loan businesses of Fincare SFB, bolstering its financial inclusion charter with a focus on micro entrepreneurs and small enterprises.
The merged entity will leverage Fincare SFB's distribution network in rural and semi-urban and AU SFB's strong product and digital capabilities to grow its deposits and lending franchise.»
Individuals who have savings accounts, fixed deposits or have availed loans from these banks are likely to be impacted by the merger. If you are a customer of either of these banks, here is how you are likely to be impacted by the merger.
- 1. Change of chequebook after the merger: If there is no name change after the merger and name of bigger bank is taken, then smaller bank customers, in this case Fincare bank customers may be required to change their chequebook after the merger. While the existing cheque book may remain valid for some time, ultimately it will be replaced with the chequebooks of the
