It will take almost a year for the merger process between Lakshmi Vilas Bank (LVB) and Indiabulls Housing Finance Ltd. (IBHF) to get completed, according to a top official.

“ I feel it might take nearly a year for the transaction to get completed,” said Parthasarathi Mukherjee, MD and CEO, LVB.

Asked what prompted the bank to go in for the merger with IBHF, he said: “Earlier, the LVB board decided to raise funds through strategic investors. Some amount was raised through qualified institutional placement. Since, we could not raise as much as was needed, we went in for the merger option.”

The merged entity would be named IBHF Lakshmi Vilas Bank. “A lot more work needs to be done with regard to the merger. A final decision about the location of the headquarters will be taken later,” he said.

Meanwhile, the All India Bank Employees’ Association (AIBEA) took exception to the merger stating that public deposits worth ₹30,000 crore were at stake. LVB should have been merged with a public sector bank instead, said C.H. Venkatachalam, general secretary, AIBEA

In a letter addressed to RBI Governor Shaktikanta Das, he said considering the fragile health of LVB, it was necessary for the central bank to take a holistic view and merge it with one of the public sector banks.

There is no need at this juncture to go into the scenario of various private sector banks in our country after the recent ICICI Bank episode. But It is important to keep a very close watch on the affairs of these private banks that deal with the substantial savings of the people at large, he said.

LVB is a private bank, but the deposits belong to the people at large and is public money, he added.

He expressed surprise that IBHF was adopting a short-circuit method to become a bank through this method, as it failed in its effort to get a banking licence earlier. This, we oppose, he said.