Hyderabad, Apr 8: All India Bank Employees' Association (AIBEA) has urged Reserve Bank of India (RBI) to consider of merging Lakshmi Vilas Bank Limited (LVB) into one of the Public Sector banks instead of merging with Indiabulls Housing Finance Limited (IBH).
'Taking into account the fragile health of LVB Limited., it is necessary for RBI to take a holistic view and merge it with one of the public sector Banks in public interest instead of allowing LVB to merge with IBH, AIBEA General Secretary Ch Venkatachalam said in a letter to RBI Governor Shakthikanta Das on Sunday.
He 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, he added.
Mr Venkatachalam also said, RBI is aware of the financial health of Lakshmi Vilas Bank Limited which has not been god 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 FY 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, the AIBEA General Secretary said, it is surprising that the Board of the Bank has taken the decision to merge with Indiabulls Housing Finance Limited.
At 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 IBH is trying to become a Bank by merging LVB with itself. This is obviously a short-circuit method by Indiabulls Housing Finance Limited and manage to become a Bank through this method, the top Union leader said.
He 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.
We urge upon you to bestows your personal attention in this regard and not allow things to happen in a hurry by permitting the merger, Mr Venkatachalam said and added that 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. (UNI)