Fincare Small Finance Bank merges with AU Small Finance Bank With an emphasis on excellent post-merger customer service and smooth integration, the consolidation expands the client base and improves the distribution network.
By Entrepreneur Staff •
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The Jaipur-based AU Small Finance Bank on Monday amalgamated Fincare Small Finance Bank (Fincare SFB), marking the first such consolidation in the sector.
In an all-stock merger deal first announced on October 29, 2023, where the shareholders of Fincare SFB received 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB, the merger received final approval from RBI on March 4, 2024, with the effective date of April 1, 2024.
As per the official release, It is anticipated that the merger will also provide AU SFB better access to South India, greatly extending its network of distribution.
Sanjay Agarwal, MD and CEO, AU Small Finance Bank, said, "This merger represents not just the amalgamation of two entities, but the convergence of our shared vision to redefine banking excellence in India. I would like to thank the Government of India and the Reserve Bank of India and all other regulatory authorities for their blessings and expeditious approval process."
According to the bank, this greater presence will make it easier to provide its extensive range of products and services to a larger clientele, enhancing its position in the region.
With this, it stated, AU SFB has a franchise with a combined customer base of about 10 million, 43,500 workers, and a network of 2,350 physical touchpoints spread across 25 states and union territories. It also boasts a balance sheet size of INR 116,695 crore and a deposit base of INR 89,854 crore.
The emphasis now switches to making sure the integration goes well over the course of the next 9-12 months as well as providing clients with outstanding banking services and value, the statement stated.
To ensure seamless transition and minimal customer disruption due to the merger, both tech-led banks with strong customer orientation have established a dedicated task force and equipped their call centres to answer all customer queries.
In 2015, the RBI licensed ten entities to establish Small Finance Banks, which would offer small farmers and microbusiness owners basic banking services.
This is the first merger and acquisition that has happened after the regulator granted a license.
The goal of the Small Finance Banks initiative is to promote financial inclusion by offering basic banking services, such as deposit acceptance and lending, to underbanked groups including small farmers, microbusiness owners, micro and small companies, and unorganised sector entities.
