To bank or not to bank on Indiabulls

A banking licence, unlike, say, a licence to enter the telecom or gas business, is not sold to the highest bidder; it goes to a "fit and proper" entity

A day after Indiabulls Housing Finance Ltd (Indiabulls) and Lakshmi Vilas Bank (LVB) announced their decision to merge and create Indiabulls Lakshmi Vilas Bank, the nation’s eighth largest private bank by assets, a Reserve Bank of India (RBI) release clarified that the merger announcement didn’t have the regulator’s approval “at this stage”. This was to quell the speculation that the central bank’s nod was a given since its two nominee directors have been on the LVB’s board. Incidentally, the mortgage company too has a couple of former RBI deputy governors on its board. One of them, S S Mundra, is