The Reserve Bank of India (RBI) has rejected Muthoot Finance's proposal to acquire IDBI Asset Management Ltd and IDBI MF Trustee Company Ltd from IDBI Bank Ltd and IDBI Capital Markets & Securities Ltd. The request for a no-objection certificate was not acceded to by RBI on the ground that, "the activity of sponsoring a Mutual Fund or owning an Asset Management Company (AMC) is not in consonance with the activity of an operating NBFC", the country's largest gold financing company said in a regulatory filing.
This is a major setback for Muthoot Finance which had announced last year to foray into mutual fund asset management space by acquiring IDBI Bank's mutual fund and asset management units. It had inked deal to acquire IDBI Asset Management and IDBI MF Trustee Company for a total consideration of Rs 215 crore.
On November 22, 2019, the Kerala-based gold loan company had entered into a share purchase agreement with IDBI Bank, IDBI Capital Markets & Securities, IDBI Asset Management and IDBI MF Trustee Company for acquisition of 100 per cent equity shares of IDBI Asset Management held by IDBI Bank and its nominees and IDBI Capital Markets & Securities, and 100 stake in IDBI MF Trustee Company held by IDBI Bank and its nominees.
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