The RBI has declined to approve Religare Enterprises’ plan to split its lending and insurance businesses into two separate listed companies.

Religare Enterprises had asked the RBI for a no objection or prior approval on the scheme, which involved moving its lending, broking and other financial services businesses into its subsidiary, Religare Finvest.

The parent company would have kept its stake in Care Health Insurance and continued as a separately listed entity.

Shareholders were meant to get one share in Religare Finvest for every share they already held in Religare Enterprises.

The RBI’s decision arrived in writing. Religare Enterprises received its letter on August 6, and Religare Finvest received a similar one the next day.

Both letters said the request had not been accepted, without going into further detail in what the company has disclosed so far.

Religare said it plans to engage with the RBI and provide whatever clarifications the regulator needs. This setback comes despite the plan clearing several other hurdles already.

Both the NSE and BSE gave their no objection to the scheme last month, and the company’s boards had approved the restructuring back in February.

Separately, markets regulator SEBI closed a long running investigation into the company at the end of July, disposing of a show cause notice from 2024 without imposing any penalty.

The demerger was designed to give Religare’s lending and insurance businesses more independent identities, each with its own listed shares and its own investor base.

For now, that plan is on hold while the company works to address whatever concerns the RBI has raised, though it hasn’t disclosed the specific reasons behind the regulator’s decision.

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