RBI yet to give go ahead to Lakshmi Vilas Bank-IHFL merger

Lakshmi Vilas Bank

Lakshmi Vilas BankDenying the media reports indicating the final approval on the amalgamation of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Ltd (IHFL), the Reserve Bank of India (RBI) notified that the merger did not acquire its nod and it would further examine the proposals once it receives them both the entities.

The board of Lakshmi Vilas Bank on Friday gave a go-ahead on a scheme of amalgamation with the IHFL. Some media reports quoted the presence of two RBI-nominated additional directors on the bank’s board as an indirect approval by the apex bank.

“It is clarified that the merger announcement does not have any approval of the RBI at this stage. It is also clarified that presence of Additional Directors nominated by the RBI on the Board of LVB does not imply any approval of the RBI of the merger proposal,” said the apex bank in its official communiqué.

“The Additional Directors have clearly mentioned at the meeting that they have no view on the proposal,” it said.

The notification further stated that it would be examining the proposals in adherence to the extant regulatory guidelines and directions and when it receives them from the entities concerned.

One of the merging entities the Lakshmi Vilas Bank also issued a statement on Saturday quoting that the RBI nominee directors did not participate in the voting or express any views.

“The bank also wishes to clarify that the process of applying to the Reserve Bank of India is now on hand. There has been no prior informal notification to the regulator,” it said.

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