Equitas SFB Board Faces RBI Queries Over MD's Daughter-Run Housing Firm

The Reserve Bank of India has queried the board and senior management of Equitas Small Finance Bank regarding its connection with Unico Housing Finance, Moneycontrol reported. The banking regulator asked directors if they knew the mortgage lender was established by Varshini Vasudevan Pathangi, the daughter of Equitas SFB Managing Director PN Vasudevan. The regulator also asked the board members if they were adequately appraised about this when Vasudevan sought a three-year extension as Managing Director earlier this year.

The central bank also requested details of any related-party transactions between the small finance bank and the housing financier.

"At the time of the MD & CEO's reappointment, his disclosures to the Board and the RBI included the investment made by his daughter in Unico Housing Finance Private Limited," an Equitas SFB spokesperson said, as reported by Moneycontrol. The person added that Vasudevan has consistently disclosed his daughter's investment in his annual disclosures submitted to the Board.

"Communication between the Bank and RBI is privileged & confidential and will remain so. Any matter that requires disclosure under applicable regulations will be disclosed to the stock exchanges from time to time," the spokesperson reportedly said.

New Supervisor Prompts Queries

The regulatory scrutiny follows the appointment of a new Special Supervisory Manager for Equitas SFB in June 2026. Under existing banking norms, the Managing Director of a bank cannot own a non-banking financial company or be related to an NBFC promoter.

A senior official reportedly expressed surprise over the inquiry. "Most times, the incoming supervisor would be briefed adequately about the entity. Hence, it is not usual for a new supervisor to ask for such information, especially when approvals are already in place," the official said, in remarks reported by Moneycontrol.

Vasudevan, who is currently serving his tenth year as the SFB’s chief, initially announced his resignation in May 2022 to focus on a charitable trust. He reversed this decision in December 2022 and was reappointed as Managing Director for three years starting July 23, 2023. Subsequently, the regulator approved a renewed three-year term for him, which commenced on July 23, 2026.

Unico Housing Finance was established in Chennai in March 2023. Pathangi promoted the mortgage lender with a paid-up equity capital of ₹240 crore.

During financial year 2026, the firm raised approximately ₹100 crore from Anicut Capital and UC Impower Funds, thereby reducing the promoter holding to 62.66%. Anicut injected a further ₹55 crore through a follow-on offer on August 13, 2026.

The non-bank lender shares significant leadership ties with Equitas SFB and Cholamandalam Investment and Finance Company, a company which is also Vasudevan's alma mater. Chief Executive Officer Babu Vellingiri previously spent 19 years at Cholamandalam. Chairman N Rangachary formerly headed the Equitas SFB board.

The housing financier recorded revenues of ₹91.15 crore in FY26, while reporting a net loss of ₹44 crore, as against ₹47 crore of net loss a year ago. The total loan book expanded to ₹646 crore in FY26, up from ₹390 crore in FY25. Gross non-performing assets climbed to 1.45%, versus 0.26% a year ago.