Following the demerger, both REL and RFL were expected to be listed separately on the stock exchanges

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Bloomberg

The Reserve Bank of India (RBI) has rejected the proposed demerger scheme that sought to transfer Religare Enterprises (REL) lending and financial services business to its subsidiary, Religare Finvest (RFL).Under the proposed scheme of arrangement, REL was to retain its stake in Care Health Insurance and continue as an insurance-focused entity. The financial services business, comprising lending, broking, investment activities, and related ancillary and support services, was proposed to be transferred to RFL on a going-concern basis.Following the demerger, both REL and RFL were expected to be listed separately on the stock exchanges.In February, the company’s Board of Directors approved the demerger plan, and in July, it received no-objection certificates from both the NSE and BSE.Both REL and RFL had submitted applications to the RBI seeking its no-objection to the scheme. REL said it had received a letter from the central bank stating that the application had been examined and that the request had not been acceded to.A similar communication was received by RFL. “REL and RFL will engage with the regulator and provide further clarifications, as may be required in this regard,” the company said.As per the proposed arrangement, shareholders were to receive one share of Religare Finvest for every share held in Religare Enterprises.Incidentally, market regulator SEBI closed its long-running investigation into the company in July, disposing of a show-cause notice issued in 2024 without imposing any penalty.The demerger was designed to provide Religare’s lending and insurance businesses with distinct identities, allowing each entity to operate with its own listed shares and dedicated investor base.For now, however, the restructuring plan has been put on hold until the company addresses the concerns raised by the RBI. The regulator has not disclosed the specific reasons for rejecting the proposal.Published on August 7, 2026