AU Small Finance Bank merges with Fincare Small Finance Bank

By Gloria Mathias

AU Small Finance Bank and Fincare Small Finance Bank have approved an all-stock merger of AU SFB and Fincare SFB.

The merger is subject to the approval of shareholders of AU SFB and Fincare SFB respectively, RBI under the Banking Regulation Act and the Competition Commission of India.

Upon obtaining the required approvals, Fincare SFB shall merge into AU SFB, and shareholders of Fincare SFB shall receive shares of AU SFB in exchange for their shares in Fincare SFB at the approved share swap ratio. All employees of Fincare SFB shall become part of the AU SFB family.

The merger enhances AU SFB’s portfolio by adding Fincare SFB’s rural, inclusion-focused microfinance, mortgages, and gold loan businesses, strengthening its commitment to financial inclusion for micro-entrepreneurs and small enterprises.

The merged entity will leverage Fincare SFB’s distribution network in rural and semi-urban and AU SFB’s strong product and digital capabilities to grow its deposits and lending franchise. The merger will deliver synergies in deposits, technology, and scale-driven efficiencies and, over time, will be accretive to key financial metrics.

Sanjay Agarwal, MD & CEO, AU SFB said, “I am delighted about the coming together of two successful and well-governed SFB franchises with common charter of promoting financial inclusion. This is not just a merger of two entities, it’s a union of shared values, common goals, and a vision for the future. Rajeev and team are one of the most experienced and seasoned MFI teams in the country who have over the years, built the business ground up despite multiple challenges and a strong tech-enabled SFB franchise. We welcome all Fincare employees as part of the AU SFB family and are excited about the journey ahead of us”.

Rajeev Yadav, MD & CEO, Fincare SFB said, “This merger is a defining milestone in our journey towards facilitating financial inclusion in India, and by joining hands with AU SFB’s strong franchise led by Sanjay and his team, we are confident of building a world-class bank with a robust balance sheet and a truly national franchise”.