Source : INDIA TODAY NEWS
The Reserve Bank of India (RBI) has sought details from the board and senior management of Equitas Small Finance Bank about its relationship with Unico Housing Finance, according to people aware of the matter, reported Moneycontrol.
RBI officials have asked board members whether they were aware that Unico Housing Finance was founded by Varshini Vasudevan Pathangi, daughter of Equitas SFB MD & CEO PN Vasudevan.
advertisement
The regulator has also asked whether the board was adequately informed about this relationship when Vasudevan sought a fresh three-year term as the bank’s MD & CEO earlier this year.
More recently, the RBI has also sought details of any related party transactions between Equitas SFB and Unico Housing Finance, the people said, mentioned the report.
WHAT EQUITAS SFB SAID
Responding to a query from Moneycontrol, an Equitas SFB spokesperson said Vasudevan had disclosed his daughter’s investment in Unico Housing Finance to both the bank’s board and the RBI at the time of his reappointment.
The spokesperson said Vasudevan had consistently disclosed his daughter’s investment in Unico Housing Finance in his annual disclosures submitted to the board, including during the reappointment process.
On questions about related party transactions, the bank said communication between the bank and RBI was confidential. It added that any matter requiring disclosure under applicable regulations would be disclosed to the stock exchanges.
WHY RBI’S QUESTIONS MATTER
The recent queries have come against the backdrop of a change in the RBI’s supervisory arrangement for Equitas SFB, according to people familiar with the matter.
A new Special Supervisory Manager (SSM), who acts as the RBI’s key point of contact with a regulated entity on supervisory matters, took charge of overseeing the bank in June, the people said.
According to a senior official who did not want to be named, a new supervisor would normally be briefed about important matters concerning the entity. Banking regulations also restrict an MD & CEO from being an owner of an NBFC or being related to a promoter of an NBFC.
VASUDEVAN’S EARLIER DECISION TO STEP DOWN
Vasudevan is currently in his tenth year as the chief of Equitas SFB.
In May 2022, he had announced that he would step down from the bank to focus on social welfare through his public charitable trust. However, he reversed his decision in December that year. He was subsequently reappointed as MD & CEO for a three-year term beginning July 23, 2023.
The RBI has now approved another three-year term for Vasudevan, starting July 23, 2026.
WHO IS BEHIND UNICO HOUSING FINANCE?
Unico Housing Finance was incorporated in March 2023 and is headquartered in Chennai. It was promoted by Varshini Vasudevan Pathangi, daughter of PN Vasudevan, who was around 19 years old at the time.
The company had a paid-up equity capital of Rs 240 crore. In FY26, Unico Housing raised around Rs 100 crore from homegrown private equity firms Anicut Capital and UC Impower Funds. This reduced the promoter’s holding to 62.66%, according to the company’s FY26 annual report.
On August 13, Anicut Capital invested another Rs 55 crore in Unico Housing as part of a follow-on investment.
SEVERAL LINKS TO EQUITAS AND CHOLAMANDALAM
Babu Vellingiri, MD & CEO of Unico Housing, previously worked at Cholamandalam Investment and Finance Company for 19 years. Cholamandalam is also where Vasudevan worked earlier.
Unico Housing’s senior management also has several executives who previously worked with Cholamandalam or Equitas SFB, according to the company’s website.
Its chairman, N Rangachary, was previously the chairman of Equitas SFB.
– Ends
SOURCE :- TIMES OF INDIA
