New Delhi (NVI): The Union Cabinet, headed by Prime Minister Narendra Modi, today approved the scheme of amalgamation of the Chennai-based Lakshmi Vilas Bank (LVB) with DBS Bank India Limited (DBIL).
With this there will be no further restrictions on the depositors regarding the withdrawal of their deposits, Union Minister Prakash Javadekar informed while addressing a media briefing.
The Reserve Bank of India (RBI) on November 17 proposed the merger of the 94-year-old lender with the Indian arm of Singapore’s DBS Bank.
RBI had placed Lakshmi Vilas Bank under one-month moratorium on November 17, superseded its board and capped withdrawals at Rs 25,000 per depositor.
As part of the amalgamation, DBIL will infuse fresh capital of Rs 2,500 crore into LVB.
With the approval of the scheme, LVB will be amalgamated with DBIL from the appointed date, and with this there will no further restrictions on the depositors regarding withdrawal of their deposits.
DBIL is a banking company licensed by RBI and operating in India through wholly owned subsidiary model, DBIL has a strong balance-sheet, with strong capital support and it has the advantage of a strong parentage of DBS, a leading financial services group in Asia, with presence in 18 markets and headquartered and listed in Singapore.
The combined balance-sheet of DBIL would remain healthy even after amalgamation and its branches would increase to 600.
The speedy amalgamation and resolution of the stress in LVB is in line with Government’s commitment to a clean banking system while protecting the interests of depositors and the public as well as the financial system.
-CHK
