The Lakshmi Vilas Bank Ltd. has decided to merge with Indiabulls Housing Finance Ltd., the two entities said in separate notifications to stock exchanges on Friday.
“[We] emphatically deny that,” Ajit Kumar Mittal, executive director at Indiabulls Housing Finance, told in an interview. “We now have a clear framework for private sector banking licenses and mergers between NBFCs (non-bank lenders) and banks. In letter and spirit, we qualify for both banking license and merger process.”
Indiabulls Finance added, “The merger will create stable low-cost funding in the form of public deposits and expanded distribution franchise.”
Mittal said, “The RBI has said that entities, where at least 60 percent of income and assets are from financial services, are eligible. We have a proven track record in financial services.”
For every one share of Rs 10 each, shareholders of Lakshmi Vilas Bank will receive 0.14 equity share of Rs 2 each of Indiabulls Housing Finance, the bank said in its filing.