New Delhi: Government-owned IDBI Bank said there is no formal proposal from L&T Finance Holdings for merger with the bank.

“There is no proposal from L&T Finance for merger,” IDBI Bank Managing Director and CEO Kishor Kharat said.

According to recent reports, L&T Finance Holdings would like to effect a reverse merger with the lender.

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Kharat said that bank’s transformation process has been initiated as outlined by finance minister Arun Jaitley but there was no proposal of a merger.

In December, the government approved IDBI Bank for raising Rs 3,771 crore during the year, through Qualified Institutional Placement (QIP), a move which will dilute its holding by about 26 per cent in the lender.

IDBI established in 1964 reshaped its role from a development finance institution to a commercial institution with Parliament passing the IDBI Repeal Act in 2003.

In September 2004, the Reserve Bank of India (RBI) incorporated IDBI as a ‘scheduled bank’ under the RBI Act, 1934.

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