India to fold Lakshmi Vilas into local arm of Singapore's DBS

AION is a partnership between New York-based Apollo Global Management and a unit of India's ICICI Bank. Lakshmi Vilas shares fell 4% last week after India's Economic Times reported Clix was prepared to walk away from the deal if talks dragged on without a firm timeline.

The Reserve Bank of India on Tuesday proposed folding Lakshmi Vilas Bank into the local unit of Singapore's DBS, shortly after taking control of the Indian lender due to a "serious deterioration" in its financial position.

India also said in a statement it had temporarily capped withdrawals from Lakshmi Vilas, which had been locked in protracted talks with Clix Capital, at 25,000 rupees ($336). Lakshmi Vilas has been looking for a buyer since last year and the RBI last year rejected a proposal for it to merge with shadow lender Indiabulls Housing Finance Ltd.

Clix, part of a company owned by Mumbai-based private equity firm AION Capital, had in June submitted a non-binding offer to acquire Chennai-based Lakshmi Vilas, which has been struggling with bad loans and governance issues. AION is a partnership between New York-based Apollo Global Management and a unit of India's ICICI Bank.

Lakshmi Vilas shares fell 4% last week after India's Economic Times reported Clix was prepared to walk away from the deal if talks dragged on without a firm timeline. ($1 = 74.4490 Indian rupees)

Also Read: Andhra construction giants Venkata Rama Constructions to field a team in Indian National Rally Championship