Business

A Rs 723 Crore Loan Could Put Lakshmi Vilas Bank In A Difficult Spot

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| June 28 , 2018 , 14:01 IST

A loan of more than 723 crore rupees extended to Malvinder Mohan Singh and Shivinder Mohan Singh has created an alarming situation for Lakshmi Vilas Bank (LVB).

As per reports, Lakshmi Vilas Bank (LVB) had alleged that a fixed deposit of about Rs 800 crore by Religare Finvest in 2016 and early 2017, has adjusted towards the default on a loan made by RHC Holding and Ranchem Pvt as both the companies belong to the Singh brothers.

Later the adjustment towards the default on a loan made by RHC Holding and Ranchem Pvt was disputed by Religare Finvest and they moved to Delhi High Court for disputing adjustment of its Rs 794 Cr deposits by the bank.

As per media reports, this was not disclosed by Lakshmi Vilas Bank in its regulatory filings in its prospectus filed with Sebi in November 2017 for rights share issue. SEBI has reportedly questioned the bank and asked for its response on the same.

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As of March 2018, LVB had a net worth of over ₹2,327 crore including reserves, surplus and share capital. If an FD amount of ₹800 crore loan dispute to the Singhs is negatively impacted by a dispute then LVB’s net worth would come under pressure as per RBI norms, experts said.

Malvinder Mohan Singh and Shivinder Mohan Singh are former promoters of Ranbaxy and Fortis Healthcare.