CHENNAI: The Reserve Bank of India (RBI) has said it has not approved the announcement of a merger between Lakshmi Vilas Bank and India Bulls Housing Finance Limited.
“It is clarified that the merger announcement does not have any approval of RBI at this stage. The proposals, as and when received from these entities, will be examined in RBI as per extant regulatory guidelines/directions,” read a statement issued by chief general manager Yogesh Dayal on Saturday night.
The clarification came a day after the board of Lakshmi Vilas Bank approved the merger of the private sector lender with India Bulls Housing Finance. 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 India Bulls for every share held in the lender, according to the terms of the deal disclosed on Friday.
The India Bulls Housing Finance board has already constituted a reorganisation committee headed by its independent director and former RBI deputy governor SS Mundra.
The Reserve Bank also clarified that the presence of its two nominee directors on the bank’s board does not imply approval of the proposal.
“Reserve Bank of India has learnt through media reports that Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Limited (IBHFL) have made a merger announcement on April 5, 2019, with the approval of their respective Boards. It has been reported in a section of the media that the presence of two nominee directors of the RBI on the Board of LVB implies RBI’s indirect approval of the proposal,” the statement further said, adding that the presence of additional directors nominated by the central bank on the board of LVB “does not imply any approval of the RBI of the merger proposal.”