New Delhi: The Reserve Bank of India (RBI) has rejected the proposal to merge Lakshmi Vilas Bank into Indiabulls Housing Finance. The bank said in the information given to the stock market that, through its letter on 9 October 2019, RBI stated that  The merger application of Indiabulls Housing Finance Limited. And Indiabulls Commercial Credit Ltd. cannot be approved. ' On May 7, 2019, the bank sought approval from the RBI regarding the proposed merger.

For information, let us tell you that this bank has a high amount of debt, as well as the immediate corrective action (PCA) in the last month due to lack of sufficient money for risk management and negative returns on assets for two consecutive years. Has been kept and the bank has been banned from lending.

Under PCA, Laxmi Niwas Bank has been banned from lending, opening new branches and paying dividends. The bank will also have to work on reducing the debt given to select areas. The Economic Offenses Wing of Delhi Police had taken this step by filing a complaint against the board of Laxmi Vilas Bank and alleging misappropriation of funds. The police are investigating allegations of fraud and criminal breach of trust against the board directors.

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