The central bank of India has blocked the merging of IndiaBulls and Lakshmi Vilas, making it one of the latest banks to face problems in an already struggling sector.
This, along with most of India’s public and private sector banks are facing severe problems due to the high levels of bad loans. Both IndiaBulls and Lakshmi Vilas stock shares have reached a multi year low, with values expected to drop even more.
The merge was denied as the RBI has declared Lakshmi Vilas unfit due to insufficient capital to take risks and a loss in assets for two consecutive years. It is also being investigated for alleged misconduct of funds by its directors.
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