Opposing the proposed merger of Lakshmi Vilas Bank with Indiabulls Housing Finance Ltd, All India Bank Employees Association (AIBEA) has urged the Reserve Bank of India (RBI) not to give nod for the merger.
Earlier, Lakshmi Vilas Bank had said to have received approval from the board to merge the bank with Indiabulls Housing Finance Ltd.
The Central Bank had already clarified its stand on not giving any approval to the merger and examining the documents for further. It also said that none of its nominee members on the board of the bank were also present for the meeting.
C H Venkatachalam, General Secretary, AIBEA LVB said that Lakshmi Vilas Bank may be a private entity but the deposits in bank (around Rs 30,000 crore) belongs to the people at large and is public money.
He added, the Central Bank is aware of Lakshmi Vilas Bank’s financial health, which has not been good at all.
The bank reported a net loss of Rs 373.49 crore, during the quarter ended December 2018. In 2017-18, the loss was Rs 584.87 crore.
The lender is also suffering from Gross Non-Performing Asset of Rs 3400 crore that is 14 per cent of the total advances.
“In this background, it is surprising that the Board of the Bank has taken the decision to merge with Indiabulls Housing Finance Ltd.
“As it is already known that Indiabulls Housing Finance Ltd had applied for banking licence to start a bank on its own but the same was not sanctioned by the RBI, ostensibly for the reason that the company does not come under the fit and proper category to be granted a banking licence,” said AIBEA in its written communication to the RBI.