RBI Permits IDFC to Step Out of IDFC First Bank as Promoter
The Reserve Bank of India (RBI) had permitted IDFC to exit the IDFC First Bank. IDFC has stated that the RBI on July 20 cleared that "after the expiry of lock-in period of five years, IDFC Limited could step out as the promoter of 'IDFC FIRST Bank Limited”, according to a statement in a regulatory filing made to the BSE.
Accordingly, the company can now exit as promoter of IDFC First Bank, as the five year lock-in period has ended.
The IDFC Bank was created by demerger of the infrastructure lending business of IDFC to IDFC Bank in 2015.
Sonam Chandwani, Managing Partner, KS Legal & Associates says, "After the lock-in period, the RBI has allowed IDFC to withdraw as a promoter of IDFC First Bank. The above clarification could potentially lead to a reverse merger, which would be beneficial to IDFC Limited shareholders by increasing shareholder value."
She further adds, "Also, while the suggestions of the internal working group have not yet been implemented, the regulations are clear in terms of the holding company quitting only if it has no other organisations in its fold, paving an alternative road to departure for corporations like IDFC."