The Reserve Bank of India has not accepted the proposal for the acquisition of 85.39% stake in Indian School Finance Company by Manappuram Finance, according to a letter sent by the central bank dated September 12 to ISFC. \u201cThe bank after careful examination of the issues involved with changes in shareholding and change of management due to the proposed acquisition of shares\/CCPS\/CCDs by Manappuram Finance, has not found the proposal as acceptable,\u201d stated the RBI letter to ISFC as indicated to the stock exchanges by Manappuram on Friday. Manappuram pointed out that ISFC has provided responses to the central bank on Friday requesting for an opportunity to represent themselves again in order to provide any clarifications or requisite amendments to the proposal and requesting to pass final orders after consideration of such representation. An email sent to RBI seeking further clarifications in the matter remained unanswered till the time of going to press. Email questions sent to Manappuram Finance spokesperson and ISFC MD and CEO Neeraj Sharma also remained unanswered till the time of going to press. On July 3, Manappuram had stated that its board of directors had authorised entering into securities purchase agreement for acquisition of 85.39% of the share capital of ISFC on a fully diluted basis from certain existing ISFC shareholders. Telangana-based ISFC is a non-banking financial company (NBFC) registered with the RBI and extends loans to affordable educational institutions (including for purchase of buses), teachers, and other educational sector loans. The company started its operations in December 2008 from Hyderabad, and has expanded since to other cities. Gray Ghost Ventures and Caspian Advisors are listed as investors on ISFC\u2019s website. Manappuram had indicated that the acquisition will facilitate the company\u2019s business growth on account of a strategic partnership. \u201cBeing a niche sector and since business is both scalable and profitable, the acquisition will be a key growth driver for company,\u201d Manappuram had earlier indicated. The firm was expecting to complete the acquisition within eight months and at a cost of Rs 212.20 crore. ISFC has posted an annual operating revenue of Rs 77.29 crore with net profit after tax of Rs 10.75 crore in the year-ending March 2018, according to a report on the company\u2019s website. According to the Manappuram\u2019s release, ISFC has served over 2.6 million students through approximately 4500-plus institutions since its inception. \u201cISFC had assets under management (AUM) of Rs 154.20 crore in FY16, Rs 285.30 crore in FY17 and Rs 522.59 crore in FY18,\u201d it stated.