RBI vides merger of Lakshmi Vilas Bank & Indiabulls Housing Finance

According to the statement of Lakshmi Vilas Bank Ltd, the RBI has not approved its merger with Indiabulls Housing Finance Ltd.

The Lakshmi Vilas Bank (LVB) said in a stock exchange filing, “This is to inform that RBI vides their letter dated October 09, 2019, informed that the application for voluntary amalgamation of lndiabulls Housing Finance Ltd and lndiabulls Commercial Credit Ltd with Lakshmi Vilas Bank Ltd cannot be approved.”

Lakshmi Vilas Bank Ltd in April had informed exchanges that its board has approved a merger with mortgage financier Indiabulls Housing Finance Ltd in an all stock deal.

Both Indiabulls and Lakshmi Vilas Bank Ltd. were seeking to increase profitability and bolster capital as the crisis in the shadow banking sector drags on. The bank had sought approval from the Reserve Bank of India (RBI) on 7 May, 2019.

Indiabulls is presently looking to diversify its asset base while Lakshmi Vilas Bank needs to raise capital to come out of the lending curbs. Indiabulls’ dollar bonds and shares plunged after the Delhi High Court admitted a petition against the shadow lender and the Reserve Bank of India placed restrictions on the Lakshmi Vilas Bank.