Merger of Fincare SFB and AU SFB Strengthens Distribution Network | Company News

AU Small Finance Bank (AU SFB) made headlines on Monday as it announced the amalgamation of Fincare Small Finance Bank (Fincare SFB), marking the first consolidation in the sector. The all-stock merger deal, initially revealed on October 29, 2023, saw shareholders of Fincare SFB receiving 579 equity shares in AU SFB for every 2,000 equity shares held in Fincare SFB. After receiving final approval from the RBI on March 4, 2024, the merger is set to take effect on April 1, 2024.

The merger is expected to provide AU SFB with enhanced access to South India, significantly expanding its distribution network. This increased presence will allow the bank to distribute its wide range of products and services to a larger customer base, strengthening its market position in the region. With a combined customer base of about 10 million, 43,500 employees, and a network of 2,350 physical touchpoints across 25 states and union territories, AU SFB is set to become a major player in the sector.

Both banks have established a dedicated task force to ensure a smooth integration within the next 9-12 months, aiming to deliver exceptional banking services and value to customers. AU Small Finance Bank MD and CEO Sanjay Agarwal expressed gratitude to the Government of India, the RBI, and other regulatory authorities for their support throughout the approval process.

This merger marks a significant milestone in the sector, as it is the first merger and acquisition among Small Finance Banks since the RBI granted licences to ten entities in 2015. Designed to provide basic banking services to underserved sections such as small farmers and micro industries, Small Finance Banks play a crucial role in the financial inclusion drive in India.