Religare Enterprises' proposed demerger of its financial services business into Religare Finvest has stalled after the Reserve Bank of India (RBI) declined to grant its no-objection, Business-Today reported. The regulatory refusal halts a restructuring plan that had already secured stock exchange clearances and was awaiting statutory approvals, according to a company filing dated Aug 7.
RBI declines no-objection
In the filing, Religare said the RBI, in a communication dated Aug 6, informed the company that its application seeking no-objection or prior approval for the scheme had been examined.
Religare said the RBI informed the company that its application seeking no-objection or prior approval for the scheme "has been examined and that the request has not been acceded to".
Business-Today reported that a similar communication dated Aug 7 was received by Religare Finvest. The denial means the transfer of Religare's financial services undertaking to Religare Finvest cannot proceed through the planned route.
What the demerger involved
The scheme, approved by the boards on Feb 14, 2026, involved the transfer of the 'demerged undertaking' of Religare to Religare Finvest under Sections 230 to 232 and other applicable provisions of the Companies Act, 2013. Business-Today reported that the plan had already cleared stock exchange scrutiny before the central bank's refusal. The demerger was designed to move the financial services arm out of Religare Enterprises into Religare Finvest.
Timeline of the restructuring attempt
| Date | Event | Status |
|---|---|---|
| Feb 14, 2026 | Boards of Religare and Religare Finvest approve the demerger scheme | Approved |
| Before Aug 6, 2026 | Scheme secures stock exchange clearances | Cleared |
| Aug 6, 2026 | RBI communication to Religare declines no-objection | Declined |
| Aug 7, 2026 | Religare files regulatory update; Religare Finvest receives similar RBI communication | Received |
Regulatory gate and what it means
The RBI's decision is a distinct regulatory gate in India's corporate restructuring process. Business-Today reported that the scheme was "awaiting statutory approvals" when the central bank's refusal arrived. For finance executives and treasury professionals, the sequence illustrates that board approval and exchange clearances are necessary but not sufficient conditions for a demerger. The RBI's no-objection, communicated on Aug 6 to Religare and on Aug 7 to Religare Finvest, is a separate approval that the company did not obtain.
Impact on the restructuring and the target audience
The refusal leaves the demerger plan in limbo. Since the RBI "has not acceded to" the request, the proposed transfer of the demerged undertaking from Religare to Religare Finvest under Sections 230 to 232 of the Companies Act, 2013 cannot move forward as originally designed. The two communications, dated Aug 6 and Aug 7, mean both the parent and the transferee entity have been formally notified of the refusal. Business-Today reported the plan had "hit a regulatory hurdle", with stock exchange clearances already in place but statutory approvals pending. Investors and counterparties tracking Religare's corporate structure will need to monitor whether the company revises its application, refiles the scheme, or pursues an alternative structure. For now, the central bank's refusal is the controlling fact: the demerger, as approved by the boards on Feb 14, 2026, does not have RBI clearance. The cost of this delay falls on the companies' planned reorganisation, and the timeline for any revised approach remains undefined.
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