Slice Announced its Merger with North East Small Finance Bank Limited (NESFB)
What Led to This?
downgraded NESFB’s credit rating
from BBB- to BB+ on 17th Nov 2022 as the bank breached the minimum CAR requirement.
What is CAR?
The capital adequacy ratio (CAR)
indicates the bank’s capital in relation
to its current liabilities and risk-weighted assets.
ensures banks hold capital reserves to absorb potential losses
without insolvency. NESFB’s CAR was 11.26% as of 30 June 2022, against the minimum requirement of 15%.
This was due to SFB’s
sharp rise in the GNPA
from 28.4% on June 22 to 10.90% in March'22, along with a Rs. 128 Cr loss in Q1 FY23.
Talks of Merge
The merger has been discussed
since January 2023
when Slice onboarded Mr Eugene Emmanuel Karthak, Executive Director at RBI, as a board member.
Slice’s Stake in NESFB
Slice also acquired a
in the bank for about $3.42 M in March 2023.
Impact of the Merger
The merger is a significant move in the fintech industry after a positive signal from the RBI to
revive the financially deteriorating bank
shareholding details are not known yet
, but it is expected that Slice will own a majority stake in the combined entity.
Earn 9 - 11%
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