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Capital First merges with IDFC Bank to create IDFC First Bank

Published on December 22, 2018
The IDFC Bank has merged completely with the non-banking financial company Capital First on 18th December 2018 into a new entity to be called as IDFC First Bank.
Capital First merges with IDFC Bank to create IDFC First Bank
  • The merger between IDFC Bank and Capital First was announced on 13th December 2018.
  • The new bank i.e. IDFC First bank will have a loan asset book of Rs 1.03 lakh crore.
  • V Vaidyanathan, who is the Founder and Chairman of Capital First Ltd, has been appointed as the Managing Director and Chief Executive Officer of the newly formed IDFC First bank.

About Non-Banking Financial Company (NBFC):

  • An NBFC is a financial institution that does not have a banking license but provides banking services.
  • Operations of NBFCs are regulated under the country's banking regulations but it is established under the Companies Act, 1956.
  • The Reserve Bank of India regulates the NBFCs under Reserve Bank of India Act, 1934.
  • NBFCs can provide loans and credit facilities, offer savings and investments products and can offer money transfer services to the customers.
  • However NBFCs, unlike Banks, cannot accept demand deposits from customers.
  • NBFCs also are not a part of the country's payment and settlement system. 
  • Therefore, they cannot offer cheque facility to their customers.

Interesting to know:

  • IDFC Bank had made a deal with Shriram Group for a merger but the deal was called off as both the entities could not agree on the share swap ratio.

Question:

Q. Which bank has merged completely with the non-banking financial company Capital First on 18th December 2018 into a new entity?
a. HDFC Bank
b. GDFC Bank
c. IDFC Bank
d. JDFC Bank
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