April 7, 2019 / 6:33 AM / 4 months ago

RBI says not yet approved merger of Lakshmi Vilas and Indiabulls Housing

A policeman stands guard at the entrance of the Reserve Bank of India (RBI) headquarters in Mumbai, April 4, 2019. REUTERS/Francis Mascarenhas/Files

(Reuters) - The Reserve Bank of India (RBI) said it has not yet approved a merger proposal of private-sector lender Lakshmi Vilas Bank Ltd and Indiabulls Housing Finance Ltd.

Responding to media speculation that the presence of two nominee directors of RBI on the board of Lakshmi Vilas Bank implies RBI’s indirect approval of the deal, the central bank said the deal does not have its approval at this stage.

“It is also clarified that presence of additional directors nominated by the RBI on the Board of LVB (Lakshmi Vilas Bank) does not imply any approval of the RBI of the merger proposal”, the central bank said in a statement on Saturday, adding that the directors have no view on the deal.

It said it will examine the proposal upon receiving it from the parties in line with regulatory guidelines.

The companies had said in a filing on Friday that they will merge operations in a share-swap deal.

Shareholders of the Chennai-based bank will get 0.14 share in Indiabulls for every share held in the lender, according to terms of the deal disclosed on Friday.

Reporting by Kanishka Singh in Bengaluru; Editing by Kim Coghill

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