Equitas Holdings Ltd on Tuesday said it has divested its entire shareholding in Equitas Technologies Pvt Ltd (ETPL) as part of the requirements in accordance with Reserve Bank of India (RBI) norms for its merger with Equitas Small Finance Bank (ESFB).

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In a regulatory filing, Equitas Holdings said it completed the sale of its entire shareholding in ETPL on July 5, thereby complying with the condition stipulated by RBI.

The company said the divestment follows RBI's no objection letter dated May 6, 2022, for amalgamation of the company with ESFB wherein it was asked to divest its entire shareholding in ETPL.

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The company said it has received Rs 6.47 crore till date for the stake sale ETPL to Goldstone Technologies Ltd (GTL). "GTL is under an obligation to pay to Equitas Holdings the balance and remaining purchase consideration of Rs 1,50,00,000 within a period of six months from today i.e. July 5, 2022," it said.

The RBI approved the merger between the promoter and subsidiary company in July last year.

As part of the RBI's licensing conditions, being the promoter of ESFB, the boards of Equitas Holdings and ESFB had in July 2021 approved the scheme of amalgamation between them.

According to this scheme, all the assets held by Equitas Holdings, including its investments in ETPL, have to be transferred to and vested in ESFB.

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Equitas Holdings is the promoter of Equitas Small Finance Bank. Equitas Holdings has two subsidiaries -- ESFB and ETPL. The latter is engaged in the business of freight aggregation.

As per the RBI norms on small finance banks, it is mandatory for the promoter of a small finance bank to reduce the stake in the subsidiary to 40 percent within five years of commencement of operations of the small finance bank. ESFB commenced operations in September 2016.

As of March 31, 2022, Equitas held a 74.59 percent stake in Equitas Small Finance Bank, according to data on BSE.