Shareholders of IDFC have approved demerger of its financial business into IDFC Bank, with the company’s executive chairman Rajiv Lall telling a business news channel that banking operations are expected to start from October 1.
At a shareholder meet in Chennai on April 9, 100% of the total votes, or 99.4 crore votes, were cast in favour of demerger, the company said in a BSE notification on Friday.
“The shareholders have unanimously approved the scheme of arrangement among IDFC and IDFC Bank and their respective shareholders and creditors under Sections 391 to 394 of the Companies Act, 1956″, IDFC said in the filing.
In April last year, IDFC had bagged a licence from the RBI to set up a bank. Last month, the Chennai-based company, as part of taking forward its plan to set up bank, sought shareholders’’ approval for demerging its financial undertaking into a new entity to be named IDFC Bank.
IDFC proposes to realign its businesses to comply with the corporate structure requirements of the RBI guidelines to set up new banks and demerge its financing undertaking to IDFC Bank.
The guidelines specifically mandates that all new banks are to be set up through a non-operative financial holding company.
The demerger was in accordance with RBI conditions which requires IDFC to transfer the relevant business activities to the proposed IDFC Bank.
Lall said the bank would have 20 branches on day one and, then, as the system stabilised, it would keep expanding. The balance sheet size of the bank on adding the cash reserve ratio and statutory liquidity ratio requirements would be Rs 70,000 crore.