RBI to examine merger proposal of Indiabulls and Lakshmi Vilas Bank

The Reserve Bank Saturday said it will examine the merger proposal of Lakshmi Vilas Bank and Indiabulls Housing Finance Ltd. The statement comes amidst report that the presence of two nominee directors of the Reserve Bank of India (RBI) on the board of Lakshmi Vilas Bank implies the central bank's indirect approval of the proposal.

It is clarified that the merger announcement does not have any approval of the RBI at this stage, the apex bank said in a late evening statement. It is also clarified that presence of additional directors nominated by the RBI on the board of Lakshmi Vilas Bank does not imply any approval of the central bank of the merger proposal.

Moreover, the additional directors have clearly mentioned at the meeting that they have no view on the proposal, the RBI said in a statement. "The proposals, as and when received from these entities, will be examined in RBI as per extant regulatory guidelines/direction," it said.

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Lakshmi Vilas Bank Friday announced it will merge with Indiabulls Housing Finance to create the eighth largest private sector lender in an all-stock deal.