Several Credits Finance Company Ltd., a Non-Banking organisation is in the discussion for a merger with Hatak Bank Ltd., a scheduled Bank. Recommend the action points briefly.

In cases of scheme of merger by the Non-Banking Financial Company, approval needs to be obtained from National Company Law Tribunal, whereas the scheme by Banks need to obtain approval from Reserve Bank of India in accordance with the Master Directions by RBI, the banking Company need to ensure: The NBFC has not violated any RBI/SEBI norms; The NBFC complied with KYC of all its accounts holders; If it is found that the NBFC has any credit facilities from banks or financial institutions, whether the loan agreement mandate the NBFC to seek consent of the lending bank/financial institution for merger/amalgamation. As per paragraph 17 of the Master Direction, to enable the Reserve Bank of India to consider the application for approval, the banking company shall furnish to the Reserve Bank of India, information as specified in the schedule to the direction (except certificate in respect of names of shareholders who gave notice in writing at or prior to the meeting to the NBFC that they dissented from the scheme of amalgamation) and also the information and documents relating to the valuation along with its computation and the quoted price details.