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Lakshmi Vilas Bank to continue raising funds

Updated: Oct 11, 2019 06:04:35am
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Lakshmi Vilas Bank to continue raising funds

New Delhi, Oct 11 (KNN) Lakshmi Vilas Bank (LVB) has said that the lender would continue to raise funds  after apex banking body Reserve Bank of India's (RBI) decision not to approve the amalgamation with Indiabulls Housing Finance Ltd has put an end to the uncertainty over the proposed merger.

In a regulatory filing on Thursday, Lakshmi Vilas Bank said the bank acknowledges the decision of apex bank.

LVB, which is under prompt corrective action framework by RBI, is already planning to raise about ₹1,000 crore this fiscal through equity mode and ₹500 crore by Tier I / Tier II bonds. As on June 30, 2019, its capital adequacy ratio and Tier I CAR stood at 6.46 per cent and 4.46 per cent as against regulatory requirement of 10.875 per cent and 9 per cent.

Suffered with bad loans, the private lender reported net losses in the last two fiscal years and had a net loss at ₹237 crore for the quarter ended June 30, 2019.

The Reserve Bank of India (RBI) on Wednesday rejected the merger proposal between Lakshmi Vilas Bank and mortgage lender Indiabulls Housing Finance Limited.

"This is to inform that RBI vide their letter dated October 09, 2019, informed that the application for voluntary amalgamation of lndiabulls Housing Finance Ltd and lndiabulls Commercial Credit Ltd with Lakshmi Vilas Bank Ltd cannot be approved," Lakshmi Vilas Bank said.

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