Indiabulls founder Sameer Gehlaut in a letter assured the Reserve Bank of India (RBI) to relinquish all controls and rights after the proposed merger of Indiabulls Housing Finance and Laxmi Vilas Bank (LVB), The Economic Times reported, citing a source. adding that Gehlaut will also have no say in the management and bring the promoter group shareholding below 10 percent.

Early this year, the bank had announced its merger with Indiabulls Housing Finance in a share-swap deal with an intent to create a combined entity with a larger capital base and wider geographical reach.

The central bank is yet to approve the merger proposal which is known to be slow and selective when it comes to issuing new banking license, letting large corporations turning into banks and even permitting corporates and individuals pick up more than 5 percent in a private bank, the report added.

Gehlaut in the July 29 letter informed the RBI that the merged entity will not be identified with any group, the report said, adding that "All steps signifying a cessation of ‘control’ as per applicable laws and judicial precedents would be taken."

"We refer to our earlier announcement of a planned amalgamation with IHFL and Indiabulls Commercial Credit Ltd. We have to say that the bank is working in close cooperation with IHFL to ensure that all regulatory approvals are received at the earliest", the bank said in a regulatory filing on Thursday.

(With inputs from PTI)