A merger between the banks is not a new trend in the Indian
banking sector. In fact, the very first merger in the Indian
banking sector took place in the year 1921 between the three
presidency banks namely the Bank of Bengal, the Bank of Bombay and
the Bank of Madras when the three banks merged to form a new bank
known as Imperial Bank of India, which was renamed as State Bank of
India soon after the independence.
However, this financial year has made its place in the history
of the Indian banking sector due to the first-ever attempt made for
the merger between a bank and the non-banking financial company.
But this merger attempt has failed due to Reserve Bank of
India's ("RBI") stringent
regulations. With a blind hope of getting the merger approval, the
Lakshmi Vilas Bank and Indiabulls Housing Finance Limited (a
non-banking financial lender) announced their plan of merger in
April, 2019 and applied for the RBI's nod in May.
