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Business EconomyPosted at: Apr 22 2019 12:47PM


Merge LVB with one of PSBs in public interest: AIBEA to RBI Guv

Hyderabad, Apr 22 (UNI) All India Bank Employees' Association (AIBEA) on Monday urged the Reserve Bank of India (RBI) to take a holistic view after taking into account the fragile health of Lakshmi Vilas Bank (LVB) Limited and merge it with one of the public sector Banks in public interest instead of allowing it to merge with Indiabulls Housing Finance Limited.
In a letter to RBI Governor Shakthikanta Das, AIBEA General Secretary Ch Venkatachalam said there are reports in the media that the Board of Directors of Lakshmi Vilas Bank Limited has taken a decision to merge with Indiabulls Housing Finance Limited.
It is also reported that the two nominee Directors of RBI on the Board of the Bank were also present in the Board meeting and the Board’s decision has been taken unanimously thereby implying that the proposal has the tacit approval of the RBI.
Mr Venkatachalam said, RBI is aware of the financial health of Lakshmi Vilas Bank Limited which has not been good at all. As on December 31, 2018, the Bank has booked a net Loss of Rs 630 crore in the first 9 months of the Financial Year 2018-19. The Bank has even made an Operating Loss of Rs. 25 crore for the last Quarter ended 31-12-2018.
The Bank is also suffering from Gross NPA 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 Limited, the AIBEA General Secretary observed.
He said, as it is already known that Indiabulls Housing Finance Limited 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.
Having failed to get a banking licence, it is now found that Indiabulls Housing Finance Limited is trying to become a Bank by merging LVB with itself, he said, adding that this is obviously a short-circuit method by Indiabulls Housing Finance Limited and manage to become a Bank through it.
The Top Union Leader said there is no need at this juncture to go into the scenario of various private sector Banks in the country after the recent ICICI Bank episode. But it is important to keep a very close watch on the affairs of these private banks who deal with substantial savings of the people at large, he added.
''We urge upon you to bestow your personal attention in this regard and not allow things to happen in a hurry by permitting the merger''.
The Bank may be a private Bank but the deposits in Bank ( Rs 30,000 Crore) belongs to the people at large and is public money, Mr Venkatachalam said.
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