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RBI intensifies checks on Lakshmi Vilas Bank, Indiabulls Housing Finance, says report

Updated : September 17, 2019 12:50 PM IST

The development, the report said, comes after fresh accusations of wrongdoing emerged against both firms at a time when they are eyeing a merger.

Earlier, a PIL was filed in the Delhi High Court by NGO Citizens Whistle Blower Forum seeking investigation into alleged irregularities, diversion of funds and other violations allegedly committed by the IHF promoters, the report said.

RBI intensifies checks on Lakshmi Vilas Bank, Indiabulls Housing Finance, says report

The RBI has intensified its scrutiny on the managements of Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance (IHF), reported The Economic Times, citing people familiar with the matter. The development, the report said, comes after fresh accusations of wrongdoing emerged against both firms at a time when they are eyeing a merger.

The central bank, the report said, has asked both parties to refrain from exchanging information and have barred management interactions, sources close to the development told ET.

“There are also enquiries being done by agencies like the Enforcement Directorate and income tax, which RBI will access. Only after they receive all this information will a considered decision be made,” one of the sources was quoted as saying in the report.

As per the report, the NGO has alleged that Indiabulls promoters have been advancing dubious loans to companies owned by large corporate groups. These groups in return, allegedly, would invest a part of these funds to the accounts of companies owned by the promoters.

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