The Reserve Bank of India (RBI) has rejected Equitas Small Finance Bank's request to extend listing deadline, barring the company from opening new branches.

The holding company, Equitas Holdings Ltd (EHL), has not been able to list the bank before deadline as per licensing requirement. It has also been restricted from expanding its branches and the chief executive officer's remuneration has been frozen.

The initial public offering (IPO) of the bank now looks likely. The holding company discount for the listed stock may rise during the day's trade, however, the stock may fall.

Last week, the stock ran up on the hopes that the reverse merger would be allowed.