Ujjivan Financial Services Board approves amalgamation with Ujjivan Small Finance Bank

New Delhi: Ujjivan Financial Services Limited (Ujjivan) on Saturday said its board has approved the amalgamation of the company with its subsidiary Ujjivan Small Finance Bank to comply with the minimum public shareholding norms of SEBI.

Ujjivan said in a regulatory filing that the decision was taken based on the recommendations of the audit committee and the independent directors’ committee in the meeting held on Saturday.

As per the scheme of amalgamation, Ujjivan Financial Services (Transfer Company) will be merged with Ujjivan Small Finance Bank (Transfer Company), and the dissolution will take place without liquidation of Transferor Company.

The amalgamation is subject to the approval of Reserve Bank of India (RBI), capital markets regulator SEBI, public shareholders of the companies incorporated as well as NCLT.

Ujjivan is the holding company and promoter of Ujjivan Small Finance Bank (SFB).
Ujjivan currently holds 83.32 per cent equity shareholding and 100 per cent preference shareholding of Ujjivan SFB.

As per the minimum shareholding norms, the promoter’s minimum initial contribution in the SFB branch should be at least 40 per cent.

If the promoter’s initial stake in the SFB is more than 40 per cent, it is to be brought down to 40 per cent within a period of five years from the date of commencement of operations of the SFB.

Ujjivan said, “The above five years period for the transferee company (being SFB) expires on January 31, 2022, and the proposed amalgamation among other business objectives and benefits will enable the transferee company to ensure compliance with the above “

After the Scheme becomes effective, Ujjivan SFB will issue and allot 115 equity shares of the Bank for every 10 equity shares of Ujjivan to the shareholders of Ujjivan Financial Services. Read also: Aadhaar card update: Here’s how to check if someone is misusing your Aadhaar

Ujjivan said that the amalgamation would result in the formation of a larger and stronger entity with greater ability to conduct its operations more efficiently and competitively.
This will also lead to better administration and cost reduction. Read also: Changes in big banks, LPG, WhatsApp will be applicable from November 1, know what will be the effect on you

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