AU Small Finance Bank (AU SFB), the largest Small Finance Bank (SFB) in India, has officially announced the merger of Fincare Small Finance Bank (Fincare SFB) with and into AU SFB, in accordance with the authorization granted by the Reserve Bank of India (RBI) on March 4, 2024. This merger is expected to bolster AU SFB’s position as a prominent retail banking brand across India, leveraging digital capabilities, complementary geographic footprints, and a diverse range of client groups with expanded offerings.
The RBI provided its final approval for the merger on March 4, 2024, with an effective date of April 1, 2024. Initially disclosed on October 29, 2023, the all-stock merger transaction entailed shareholders of Fincare SFB receiving 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB. The Competition Commission of India (CCI) had previously granted approval for the merger on January 23, 2024, pursuant to Section 31(1) of the Competition Act, 2002.
Following the merger, AU SFB now boasts a combined customer base exceeding 1 crore, along with over 43,500 employees and a network encompassing more than 2,350 physical touchpoints spanning 25 states and union territories. As of December 31, 2023, on a proforma basis, the bank reported a deposit base of Rs 89,854 crore and a balance sheet size of Rs 1,16,695 crore, solidifying its position as a formidable banking franchise.
As a result of the merger, Mr. Rajeev Yadav, former MD and CEO of Fincare SFB, has been designated as the Deputy CEO of AU SFB. He will retain responsibility for overseeing all key asset businesses previously managed by Fincare SFB, now consolidated under the AU SFB Fincare Unit. The introduction of the “Fincare Unit” marks the establishment of the sixth business group within AU SFB, which recently restructured its operations into five units. Additionally, Mr. Uttam Tibrewal, Executive Director of AU SFB, has been promoted to the role of Deputy CEO and Executive Director.
With the merger completed, all 59 lakh+ customers of Fincare SFB will gain access to and benefit from AU SFB’s flagship products and top-tier digital services, encompassing both assets and liabilities. These offerings include credit cards, QR codes, video banking, and AU0101. The merger is expected to enhance AU SFB’s penetration in South India, significantly expanding its distribution network. The bank’s diverse array of products and services will now be more swiftly distributed to a broader client base, bolstering its presence in the regional market.
Mr. Sanjay Agarwal, Founder, MD & CEO of AU Small Finance Bank, remarked, “Today marks a significant milestone in our journey of building a ‘Forever Bank’ and I take this opportunity to welcome the customers, shareholders, and employees of Fincare to AU family. 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.”
“With this integration, I assure them of building a well-governed, always compliant and a stronger retail banking franchise that will, over the coming decades, contribute to the growing India story. This merger underscores our commitment to financial inclusion and with our combined strength, we can serve all segments of customers, including low-income households, HNIs as well as MSMEs, through physical and digital channels both, offering a holistic bouquet of products, including cross-border business that will get launched soon under the Authorized Dealer – Category I license (AD Cat-I),” he further added.
After the merger, it is anticipated that the balance sheet of AU SFB will exceed Rs 1.2 Lac Crores, heralding its evolution into a nationwide banking entity with a customer base of over 1 crore and a network of 2,350 physical touchpoints. Additionally, nine states are projected to host more than 100 physical touchpoints each. Over the next nine to twelve months, the bank is committed to achieving a seamless integration process and delivering superior banking services and value to its clients.
