Exclusive: No proposal to merge LVB with other bank, says Shakti Sinha

The top priority for Lakshmi Vilas Bank is to raise the capital, either through a merger or through the market and other issues, including the appointment of a full-time MD & CEO comes later, Shakti Sinha, one of the directors of the three-member committee cleared by the RBI to run the Chennai based bank told ETV Bharat's Deputy News Editor, Krishnanand Tripathi.

New Delhi: For Lakshmi Vilas Bank, the top priority is to raise the capital, either through a merger or through the market and other issues, including the appointment of a full-time MD & CEO comes later, said Shakti Sinha, one of the directors of the three-member committee cleared by the RBI to run the Chennai-based bank following the ouster of seven of its directors last month.

While confirming the news that the bank has received a non-binding offer from Clix Group, Sinha told ETV Bharat that he was not aware of any proposal to merge the Chennai based bank with a larger public sector bank.

"We are not aware of it, at least I am not aware of it," Shakti Sinha told ETV Bharat in response to a question about Lakshmi Vilas Bank's possible merger with a public sector bank.

In case of Lakshmi Vilas Bank, according to the record submitted by the bank to concerned authorities, a majority of shareholders participating in the virtual AGM voted against the reappointment of Managing Director and CEO S Sundar, and six other directors including N Saiprasad, G Jaganmohan Rao, Raghuraj Gujjar, KR Pradeep, BK Manjunath, and YN Lakshminarayana Murthy.

Some news reports suggested that the Reserve Bank of India sounded Punjab National Bank to look at the possibility of acquiring Lakshmi Vilas Bank to salvage the situation. However, later PNB denied the reports.

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As earlier reported by ETV Bharat, a senior RBI official also confirmed that the Reserve Bank was looking for a market or investor-led resolution for the bank on the lines of Yes Bank and merger of the bank with a larger public sector bank was not on the radar.

Shakti Sinha said Lakshmi Vilas Bank has received a non-binding offer from Clix Group.

“They (Clix Group) have given an offer as we have reported to Stock Exchange, they have given a non-binding offer. Our team of directors is looking into it. And when we have studied it and understood it, we will start the negotiations,” Sinha said while confirming the news of a non-binding offer from Pramod Bhasin led Clix Group.

“We signed an agreement with them in June. For the time being, let us see what the negotiations come to and then we will decide,” said the former bureaucrat.

Sinha also clarified that the bank was not in talks with any other potential partner or investors

“We will be talking to only one entity at a time,” Sinha told ETV Bharat.

Appointment of a new MD for the bank

While talking about the priorities of the 94 years old Lakshmi Vilas Bank, Sinha said the topmost priority was to raise capital.

“First priority is to raise the capital, either through merger and or through the market. This is strategy number one. Then, of course, everything else, including MD,” said the former bureaucrat.

Following the ouster of top management of Lakshmi Vilas Bank last month, a section of shareholders cleared the appointment of only three directors, former bureaucrat Shakti Sinha, Satish Kumar Kalra, former Executive Director of Andhra Bank and Meeta Makhan, who was named chairperson of the three-member committee cleared by the RBI to manage the bank.

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