Lakshmi Villas bank, a Chennai based bank received green signal from RBI to merge with Indiabulls Housing Finance, HRKatha reported this news. The stock market reacted positively to this as LVB’s share price rose almost by 5% to Rs. 97.35 on BSE.
All India Bank Employees Association (AIBEA) has opposed the merger, they have requested the RBI Governor, Shakthikanta Das not to allow the proposed merger of LVB with IHFL.
Moreover, they request RBI to merge LVB with a public sector bank. Through a letter to the governor, AIBEA General Secretary C.H. Venkatachalam has requested him to examine the merger.
Venkatachalam points out that Indiabulls Housing Finance had applied for banking licence in the past. They wanted to start a bank of their own. The same was not sanctioned by RBI, thus this merger is ploy from IBH to start banking service in India.
Since the baking license was disapproved on the grounds that they are not fit and healthy as a company then this merger comes as a surprise. Moreover, LVB is a loss making entity, why would IBHF merge with them unless they did not have a bigger game-plan.