After almost ten months of deliberations and apprehensions,the Reserve Bank of India has finally given its go ahead to Axis Banks bid to acquire the investment banking,institutional and retail equity,and distribution business of Enam Securities for a total consideration of Rs 2,067 crore,two sources in the know said. According to a source,the Reserve Bank of India has given its nod to the reworked share swap deal structure where Axis Bank will merge Enam with itself and transfer it to its subsidiary Axis Securities and Sales Limited (ASSL) at a later date. The source added that the new structure posed a threat of double taxation liability one at the time of merger with Axis Bank and other at the time of spin-off and merger with its subsidiary (ASSL). The Reserve Bank of India has now clearly worded that there will be tax liability only once and thus has given its go ahead to the deal, said the source. Another source said that the bank has called a board meeting on September 16 to apprise members of the development. The senior management of the bank is upbeat as it has received the RBI approval on the deal,and a board meeting has been called to take it forward, said a board member of the bank who did not wish to be named. The deal was in limbo for about 10 months as RBI held reservations against the share transfer of Axis Bank to Enam shareholders while the Enam businesses would get merged to ASSL. While RBI asked to restructure the deal,the new structure was facing a threat of dual taxation. The source added that the merger will be completed in 4-5 months after approvals from the Securities and Exchange Board of India,high court and its shareholders. Axis Bank had announced the acquisition in November,2010.
