Mumbai | Kolkata: AION Capital-backed Clix Capital could walk away from the proposed merger with Lakshmi Vilas Bank (LVB) if discussions on the deal continue to drag on, without a firm conclusion timeline. “We have to decide this urgently; we are happy to walk away from the deal and get on with our lives. This cannot go on forever,” Pramod Bhasin, the founder of Clix Capital, told ET.Clix Capital had submitted an indicative non-binding offer for LVB on October 8, but is yet to get any substantive response from the stressed lender that needs immediate capital infusion to survive. It is the only private-sector bank facing operational curbs imposed by the RBI on lenders having inadequate funds to cover for soured loans.Industry sources indicated that the talks have not been conclusive on the aspect of provisioning requirements against the ₹794-crore of contingent liability the bank has in relation to Religare deposits. Clix is also not comfortable on a potential hole in the bank’s book in the aftermath of the Covid disruptions.“We need to come to a conclusion; we submitted our offer a month ago. It’s not good for us or the bank to carry on like this. Hence, there is an urgency to decide one way or the other and if it doesn’t happen, we will walk away,” Bhasin added. “A lot of time has passed without any substantive discussion in the way we would have liked.”The two parties are also yet to arrive at an agreement over the appropriate valuation of LVB, which has a quarter of its loans as non-performing and has a negative capital adequacy. “So far as we are concerned, the talks are very much on. And we hope for a successful conclusion of the deal,” said Shakti Sinha, a LVB director and a key member of the committee of directors appointed by RBI following the ouster of the bank’s chief executive by shareholders. While Bhasin declined to comment on the roadblocks to the deal, ET has learnt that Clix Capital wanted the bank to make 100% provisions against the contingent liability to Religare Finvest. Its estimation that the bank may need hefty provisions to cover Covid-19 stress has pushed valuations lower, something unacceptable to some shareholders, said a person aware of the talks. “The negotiations are revolving on what is the value of the bank, what they think is our value,” Bhasin added. “The deal has to work for both sides; everyone knows they have substantial NPAs and those have to be accounted for.” Last Saturday, the bank, however, announced that it had made significant progress on the merger.Clix first showed interest in the bank in June with a “preliminary non-binding offer” which was upgraded in October to an “indicative non-binding offer”. An indicative non-binding offer includes discussions on commercial aspects of the merger, over and above the agreement to carry out due diligence on both.Stakeholders of LVB were keen to see the Clix deal through.”It would have been a win-win for both the parties. LVB has been suffering from erosion of capital but it has no problem in terms of liquidity. Clix, on the other hand, is capital-strong but has some issues on liquidity as it has borrowed funds to the tune of Rs 4,000 crore,” one of the LVB shareholders said.