Equitas SFB Removes Major Legal Overhang

Equitas Small Finance Bank Limited (EQUITASBNK) announced a 95.51% reduction in a proposed GST demand for FY22–23. Following a personal hearing on September 25, 2026, the tax authorities revised the proposed assessment from ₹533.81 crore to ₹23.95 crore. The decision follows the bank's clarification that interest income on core loans and advances is statutory-exempt from GST. This update averts a potential ₹509.86 crore risk to the bank's balance sheet and net worth. A financial hit cannot be reliably quantified for the remaining ₹23.95 crore until final adjudication, but the maximum remaining impact is capped at ~13% of single-quarter PAT. The bank will produce further documentary evidence to contest the balance demand. The key risk remains any potential reopening of similar tax claims for subsequent fiscal years. The removal of this overhang restores confidence in book value preservation.