New Delhi: The Union Cabinet chaired by Prime Minister Narendra Modi approved the scheme of merger of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL). The merger has been planned on the application of RBI under section 45 of the Banking Regulation Act, 1949, to protect the interest of depositors and financial and banking stability. Simultaneously, the Reserve Bank of India (RBI), on the advice of the government, imposed the Moratorium on LVB for a period of 30 days on 17.11.2020 and appointed an administrator above its board of directors to protect the interest of depositors. .
After inviting suggestions and objections from the public and stakeholders, the Reserve Bank of India formulated the plan for the merger and it was submitted for government approval. This work was done long before the end of the moratorium period to reduce the hassle of depositors not being able to withdraw their funds due to the applicable moratorium. Once the scheme is approved, LVB will be merged with DBIL on a reasonable date and there will be no restriction on depositors to withdraw their funds.
DBIL is a banking company licensed by RBI and operating in India on a wholly owned subsidiary model. DBIL has a strong balance sheet (balance sheet), adequate capital and is also in a position of additional profit due to its association with DBS. DBS is a leading financial services group in Asia with a presence in 18 markets and headquartered in Singapore. He is also listed on the Singapore Stock Exchange. Even after the merger, DBIL’s combined balance sheet will remain strong and its number of branches will increase to 600.
The rapid merger of LVB and its solution to the problem is in line with the Government’s commitment to establish a clean banking system and is in the interest of depositors and the general public as well as the financial system.