RBI Approves Merger of Tata Capital & Tata Motors Finance

Current Context: The Reserve Bank of India (RBI) approved the merger of Tata Capital and Tata Motors Finance on October 14, 2024.

• This merger will create India's 12th largest non-banking finance company (NBFC).
• Tata Capital will issue equity shares to Tata Motors Finance shareholders, resulting in Tata Motors holding a 4.7% stake in the new entity.
• The merger aims to attract new customers in the commercial vehicle and passenger car financing segments, enhance customer service with digital offerings, and provide growth opportunities for employees.

Question:

1 What will the merger of Tata Capital and Tata Motors Finance create?

• A) India's 10th largest non-banking finance company (NBFC)
• B) India's 12th largest non-banking finance company (NBFC)
• C) India's 15th largest non-banking finance company (NBFC)
• D) India's 18th largest non-banking finance company (NBFC)

Answer: B) This merger will create India's 12th largest non-banking finance company (NBFC). Tata Capital will issue equity shares to Tata Motors Finance shareholders, resulting in Tata Motors holding a 4.7% stake in the new entity.