In a setback to Indiabulls Group's plans to enter the banking space, the Reserve Bank on Wednesday rejected the proposed merger of Indiabulls Housing Finance with troubled private sector lender Lakshmi Vilas Bank.
Speculations were rife about the fate of the merger, announced in April this year, after the Reserve Bank of India (RBI) imposed restrictions on Lakshmi Vilas Bank due to its weak financial health.
The regulator's decision also comes against the backdrop of both the entities being entangled in legal woes.
"...this is to inform that RBI vide their letter dated October 9, 2019, informed that the application for voluntary amalgamation of lndiabulls Housing Finance Limited and lndiabulls Commercial Credit Limited with the Lakshmi Vilas Bank (LVB) cannot be approved," the bank said in a stock exchange filing.
The bank did not cite any reason for rejection of the merger proposal.
The Tamil Nadu-based bank had sought approval for merger with Indiabulls Housing Finance from the RBI .
