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    RBI nixes Muthoot Finance's plan to acquire IDBI Mutual Fund

    Synopsis

    Muthoot Finance had proposed to purchase 100 equity shares of IDBI AMC and IDBI MF Trustee Company held by the sellers for a total consideration of Rs 215 crore.

    Agencies
    The RBI has turned down the proposal of Muthoot Finance to acquire IDBI Bank's mutual fund business, saying sponsoring a mutual fund is not in consonance with the activity of an operating NBFC. According to a regulatory filing by IDBI Bank on Tuesday, a share purchase agreement with regard to sale of IDBI Mutual Fund to Muthoot Finance was signed on November 22, 2019.

    "The agreement was entered into by and between Muthoot Finance, IDBI Bank, IDBI Capital Markets & Securities, IDBI Asset Management and IDBI MF Trustee Company...for acquisition by Muthoot Finance of 100% equity shares of IDBI Asset Management held by IDBI Bank and its nominees and IDBI Capital Markets & Securities, and 100 % equity shares of IDBI MF Trustee Company held by IDBI Bank and its nominees," it said.

    This was subject to receipt of necessary regulatory approvals from the Securities and Exchange Board of India (Sebi) and other regulators.

    "As advised by Muthoot Finance, we (IDBI Bank) would like to inform that their request for a no objection certificate was not acceded to by Reserve Bank of India on the ground that, the activity of sponsoring a Mutual Fund or owning an Asset Management Company is not in consonance with the activity of an operating NBFC," the filing said.

    Muthoot Finance had proposed to purchase 100 equity shares of IDBI AMC and IDBI MF Trustee Company held by the sellers for a total consideration of Rs 215 crore.
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    2 Comments on this Story

    Jacob Thomas61 days ago
    What was RBI doing over this proposal for the past 12 months. Looks like the RBI top brass is all sleeping
    Binu Pillai62 days ago
    Very bad.. Why RBI took do many months to make their decision?? If it was with ADANI, AMBANI- the RBI would have granted permission in one weeks time..
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