Mumbai, Oct 17 (IANS): The Competition Commission of India (CCI) has approved the proposal of Infrastructure Development Finance Company (IDFC) to merge with its banking arm IDFC First Bank.

"The CCI vide its letter dated October 17, 2023 has communicated that it has considered and approved the combination under Green Channel Route," IDFC said in a regulatory filing with the stock exchange.

The proposal for the merger was approved by the board of directors of IDFC and IDFC First Bank on July 3.

The proposed amalgamation would come into effect after it receives the clearance from statutory and regulatory bodies such as the Securities and Exchange Board of India, the Reserve Bank of India and the National Company Law Tribunal (NCLT).

IDFC holds a stake of around 30.93 per cent in IDFC First Bank through its non-financial holding company. The two entities have set a target to complete the merger during the current financial year. Under the terms of the proposed merger, shareholders of IDFC will get 155 shares of IDFC First Bank for every 100 shares held in the former.

"The share exchange ratio for the amalgamation of IDFC Limited with IDFC First Bank shall be 155 equity shares of face value of Rs 10/- each fully paid-up of IDFC First Bank for every 100 equity shares of face value of Rs 10/- each fully paid-up of IDFC Ltd,'' according to IDFC First Bank's earlier filing with the stock exchange.

The decision came in the backdrop of a similar merger of Housing Development Finance Corporation (HDFC) with HDFC Bank on July 1.

IDFC First Bank's shares were priced at ?91.63, up 0.79 percent at the closing of the trading session on Monday.