The RBI has turned down the proposal of Muthoot Finance to amass IDBI Financial institution’s mutual fund enterprise, saying sponsoring a mutual fund will not be in consonance with the exercise of an working NBFC. Based on a regulatory submitting by IDBI Financial institution on Tuesday, a share buy settlement with regard to sale of IDBI Mutual Fund to Muthoot Finance was signed on November 22, 2019.
“The settlement was entered into by and between Muthoot Finance, IDBI Financial institution, IDBI Capital Markets & Securities, IDBI Asset Administration and IDBI MF Trustee Firm… for acquisition by Muthoot Finance of 100% fairness shares of IDBI Asset Administration held by IDBI Financial institution and its nominees and IDBI Capital Markets & Securities, and 100 % fairness shares of IDBI MF Trustee Firm held by IDBI Financial institution and its nominees,” it mentioned.
This was topic to receipt of needed regulatory approvals from the Securities and Alternate Board of India (Sebi) and different regulators.
“As suggested by Muthoot Finance, we (IDBI Financial institution) wish to inform that their request for a no objection certificates was not acceded to by Reserve Financial institution of India on the bottom that, the exercise of sponsoring a Mutual Fund or proudly owning an Asset Administration Firm will not be in consonance with the exercise of an working NBFC,” the submitting mentioned.
Muthoot Finance had proposed to buy 100 fairness shares of IDBI AMC and IDBI MF Trustee Firm held by the sellers for a complete consideration of Rs 215 crore.