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Muthoot Finance on Tuesday said its plan to acquire IDBI Mutual Fund was not accepted by Reserve Bank of India.

“We would like to inform that Muthoot Finance Limited’s request for a no objection certificate was not acceded to by the Reserve Bank of India on the ground that, ‘the activity of sponsoring a Mutual Fund or owning an Asset Management Company is not in consonance with the activity of an operating NBFC’,” it said in a regulatory filing.

It has accordingly informed SEBI through a letter on November 23 that it would be unable to proceed with the proposed transaction. Muthoot Finance had, in November last year, entered into a share purchase agreement with IDBI Bank, IDBI Capital Markets and Securities, IDBI Asset Management and IDBI MF Trustee Company to acquire 100 per cent equity shares of IDBI Asset Management and IDBI MF Trustee Company. The deal was estimated at ₹215 crore and would have paved the way for Muthoot’s entry into mutual fund asset management space.