Equitas will apply for a Universal Banking license after the merger

Mumbai: Equitas Small Finance Bank will apply for a universal banking license as soon as its merger with its holding company is complete. However, even with a universal banking license, it would continue to focus on small lending on the asset side, founder and MD PN Vasudevan told TOI.
The bank’s shares were hammered after Vasudevan announced his decision to step down and devote his time to working for a charitable trust. From a high of Rs 77 last year, the shares last traded at Rs 41 on Wednesday.
According to Vasudevan, he had to announce his decision early because otherwise the council would not be able to search for a successor. “That’s what we’ve done now and the succession plan is in motion.” He added that he would be there for the transition. “There’s no time pressure and I’m not particularly in a rush. So we didn’t give ourselves a timetable at all. We will go through the process and identify someone who ticks all the boxes,” he said.
Vasudevan said the bank is fundamentally in a strong position as the Covid stress is over and growth is back. The bank forecasts loan growth of 30%. “The script is quite good from the point of view of a small financing bank. Liquidity is not an issue at all, and interest rate increases we are able to pass on to our borrowers,” he said.
“We have obtained the RBI NOC for the merger, after which we will need approval from Sebi and the National Company Law Tribunal and shareholders,” Vasudevan said. The bank reduced the share of microfinance portfolio from 30% pre-Covid to 18% and increased the share of secured loans.

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