Equitas Small Finance Bank has issued a clarification regarding a recent article titled “RBI questions ‘nexus’ between Equitas SFB and Unico Housing Finance”. The bank states that, apart from a single deposit transaction placed by Unico about two and a half years ago, there have been no other transactions or relationships between the entities. The bank also confirmed that the MD & CEO has consistently disclosed his daughter’s investment in Unico to the Board and relevant authorities.
Clarification on Media Article
Equitas Small Finance Bank Limited (SFB) has responded to a recent article published by Moneycontrol.com, which questioned the ‘nexus’ between Equitas SFB and Unico Housing Finance. The bank’s clarification asserts that the term ‘nexus’ implies a relationship not in line with regulatory guidelines, which it denies.
The bank clarified that, with the exception of one deposit transaction of ₹25 crores placed by Unico with Equitas SFB on January 1, 2024, for a period of 89 days, there have been no other transactions of any kind between the two entities. This deposit was made in the ordinary course of business, at arm’s length, and in compliance with regulations. The deposit matured and was repaid on March 30, 2024. Equitas SFB also explicitly stated that it has not provided any loans to Unico and does not intend to do so in the future.
Disclosure on MD & CEO’s Investments
In response to the article’s mention of the regulator’s inquiry regarding the MD & CEO’s disclosures, Equitas SFB confirmed that Mr. P N Vasudevan has consistently disclosed the investment made by his daughter in Unico Housing Finance to the Board. These disclosures were made both in his annual disclosures and at the time of his re-appointment. The bank also stated that this investment has been disclosed to the Reserve Bank of India (RBI) as part of the re-appointment proposals.
Equitas SFB affirms that all disclosures required under applicable regulations were made in connection with the re-appointment of the MD & CEO.
Regarding related party transactions, the bank reiterated that communication between the Bank and RBI is privileged and confidential. Any matter requiring disclosure under applicable regulations will be communicated to the stock exchanges. The bank confirmed booking a 89-days bulk deposit of ₹25 crore for the housing financier in 2024, which was subsequently closed within the same year.
The bank also addressed the regulation stating that the MD & CEO of a bank should not be an owner of an NBFC or related to a promoter of an NBFC. Equitas SFB confirmed that Mr. P N Vasudevan, MD & CEO, is compliant with the applicable proviso to Section 10B of the Banking Regulations Act, 1949, regarding substantial interest in other companies.
Source: BSE
