CURRENT AFFAIRS

Detailed explanation-1: -and Capital First Ltd. today announced the completion of merger following the receipt of all requisite shareholder and regulatory approvals and the merged entity will be called IDFC First Bank, subject to shareholders’ approval.

Detailed explanation-2: -The boards also approved a share swap ratio of 139 shares of IDFC Bank for 10 shares of Capital First, a debt financing firm for small entrepreneurs. The merger will also result in V Vaidya-nathan, currently chairman and managing director of Capital First, succeeding Ra-jiv Lallas MD and CEO of the merged entity.

Detailed explanation-3: -In 2010, IDFC become the first NBFC to be classified as Infrastructure Finance Company (IFC) by RBI. In 2013, the company applied for Banking License from RBI and obtained in principle approval in 2014 to set up a bank for a period of 18 months.

Detailed explanation-4: -The reverse merger of IDFC with IDFC First Bank is aimed at unlocking value for the former’s shareholders. As such, the exercise offers little benefit to the bank. In fact, the transaction needs to take care of the extent of dilution faced by existing shareholders of the bank.

Detailed explanation-5: -IDFC and IDFC First Bank Merger details: In a regulatory filing on December 30, 2021, IDFC First Bank had given approval for the merger of IDFC and IDFC First Bank.