No call yet on Lakhsmi Vilas Bank-Indiabulls merger

Mumbai: Placing Lakhsmi Vilas Bank under the prompt corrective action framework cannot be construed as RBI having made up its mind on the lender's merger proposal with Indiabulls Housing, Governor Shaktikanta Das said on Friday.

He also advised the all stakeholders not to draw any inferences now based on the punitive action on the South-based mid-sized lender.

Indiabulls promoters' roots in the realty space has made the RBI decision on its merger proposal with LVB a keenly watched event, as the central bank has a pronounced distaste for the sector fraught with volatilities.

However, LVB's low capital buffers, because of which it has been placed under PCA, has made it into difficult choice for the regulator as the merger will ensure it gets the gush of capital it needs.

Asked if placing LVB under PCA should be seen as the RBI having made up its mind on the merger not going through, Das termed this as a "speculative question".

"As long as a decision is given out in the public domain, it is not correct on our part (to interpret). I would not like to comment on individual cases till we come out publicly," Das told reporters.

The Indiabulls management has been making public pronouncements on how they would bring down their stake if the merger goes through and as part of that have already started to exit the non-kosher realty businesses.