NEW DELHI: Shares of Equitas Holdings fell over 10 per cent in Monday’s trade after RBI barred the company's wholly-owned subsidiary Equitas Small Finance Bank from opening new branches. The RBI froze the remuneration of the MD & CEO as Equitas failed to list subsidiary Equitas Small Finance Bank (ESFB) within the stipulated deadline.

Licensing conditions for Small Finance Banks (SFBs) with a capital base of over Rs 500 crore are required to list within three years from the commencement of operations. ESFB was consequently to list on or before September 4, 2019.

Following the development, the scrip fell 10 per cent to hit a low of Rs 104.40 on BSE. The RBI said that restrictions may be imposed if the bank fails to make satisfactory progress.

Equitas Holdings had approached the regulator with a reverse merger proposal. Since, the regulator did not give consent to this proposal, the boards of Equitas Holdings and the banking arm had approved a scheme of arrangement wherein ESFB would capitalise its free reserves and issue shares to the shareholders of Equitas Holdings without cash consideration, in proportion to their holding in the company.

This arrangement was subject to approval from SEBI, RBI, NCLT, shareholders and creditors.

“ESFB had applied to Sebi for their approval of this Scheme. Post such an approval, application to NCLT is required to be made for the remaining approvals. In case, it does not get approved, ESFB would be taking immediate steps for an IPO and get its shares listed as soon as possible,” the company told BSE.