Hitting four birds with one Bullet: Bandhan Bank and Gruh Finance merge
A new entrant in the banking space, Bandhan Bank has acquired HDFC Ltd-promoted Gruh Finance in an all-share deal. On January 7, 2019, the board of directors of Bandhan Bank and Gruh Finance approved the merger subject to regulatory and shareholder approvals. The merger will reduce the promoter stake in Bandhan Bank to 61%, from 82.3% as a first step towards finally reducing to 40% as directed by Reserve Bank of India (RBI) based on norms for holding of promotors in private sector bank. The RBI’s new licensing guidelines stipulates that Bandhan Bank’s promoter will have to reduce stake from 82% to 40% within three years, to 20% within 10 years and to 15% within 12 years of commencing its business. Post-merger, HDFC Ltd will hold 15% stake in the merged entity. Gruh Finance was incorporated on July 21, as subsidiary of Housing Finance Development Finance Corporation (HDFC). Gruh Finance has reported strong financials. Gruh Finance has been growing well with 20% loan and profit