The Reserve Bank of India (RBI) on Tuesday has issued a no objection certificate for the merger of IDFC Bank and Capital First.

Capital First Home Finance and Capital First Securities will also merge with the IDFC Bank.

Capital First is being acquired by IDFC Bank for around $1.5 billion.

“The RBI has, via its letter dated June 4, 2018, conveyed its 'No Objection' for the voluntary amalgamation of Capital First Limited, Capital First Home Finance Limited and Capital First Securities Limited with IDFC Bank Limited, subject to compliance with the terms and conditions specified therein,” the bank said in a late night BSE filing.

Rajiv Lal, managing director and vice chairman of the IDFC Bank, will be the non-executive chairman of the merged entity. V Vaidyanathan, executive chairman of Capital First Ltd will be the CEO of the new entity.

"IDFC Bank has 2.5 million customers and merged entity will have about six million customers," Lal told CNBC-TV18.

The merger process will be completed in 4-5 months, said Lal.

After getting the RBI's approval, IDFC Bank will now have to approach the shareholders and creditors of the merged companies and a nod from the National Company Law Tribunal (NCLT) is also required for the merger.

Capital First, provider of loans to small businesses, is backed by buyout firm Warburg Pincus.

First Published:Jun 6, 2018 9:27 AM IST