Mumbai (Maharashtra), Oct. 10 -- : The proposed merger of private sector lender Lakshmi Vilas Bank (LVB) with home financier Indiabulls Housing Finance has failed to get approval from the Reserve Bank of India (RBI).

"The RBI informed that the application for voluntary amalgamation of lndiabulls Housing Finance and lndiabulls Commercial Credit with Lakshmi Vilas Bank Ltd cannot be approved," said the Chennai-based bank in regulatory filings late on Wednesday.

The rejection comes after the RBI last month put LVB under the prompt corrective action (PCA) framework due to a high level of bad loans, lack of sufficient capital to manage risks and negative returns on assets for two consecutive years.

Under a corrective action, the RBI restricts...