18 November,2020 10:38 AM IST | Mumbai | PTI
Reserve Bank of India. File pic
The Reserve Bank of India (RBI) on Tuesday unveiled a draft scheme to amalgamate private sector lender Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd (DBIL).
The decision followed soon after the RBI imposed a one-month moratorium on the private lender and capped deposit withdrawals at Rs 25,000.
The proposed scheme of amalgamation is under the special powers of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949.
According to RBI, the proposed amalgamation will provide stability and better prospects to Lakshmi Vilas Bank's depositors, customers and employees following a time of uncertainty. "At the same time, the proposed amalgamation will allow DBIL to scale its customer base and network, particularly in South India, which has longstanding and close business ties with Singapore," it said.
ALSO READ
Special | Maharashtra assembly elections: Who’s the real NCP in Mumbra-Kalwa?
Maharashtra assembly elections: Want unity, not CM post, says Uddhav Thackeray
Maharashtra assembly elections likely only after Diwali
Raut defends Uddhav's push for decision on CM's face from MVA allies
Long queues at voting centres as first ever hawkers polls in city begin
To support the amalgamation, DBS will inject Rs 2,500 crore (SGD 463 million) into DBIL if the scheme is approved. This will be fully funded from DBS' existing resources.
DBS will await final decision on the proposed scheme from RBI and the Government of India, and will announce further details at a later stage.
DBS has been in India since 1994. In March 2019, to expand the franchise and build greater scale, DBS converted its India operations to a wholly owned subsidiary, DBIL. DBIL is now present in 24 cities across 13 states. Lakshmi Vilas Bank has a 94-year history in India, with an established retail and SME customer base, and a strong presence in South India.
The Lakshmi Vilas Bank has been placed under an order of moratorium on November 17, 2020 which will be effective upto December 16, 2020, under section 45 of the Banking Regulation Act, 1949.
Catch up on all the latest Crime, National, International and Hatke news here. Also download the new mid- day Android and iOS apps to get latest updates.
Mid-Day is now on Telegram. Click here to join our channel (@middayinfomedialtd) and stay updated with the latest news
This story has been sourced from a third party syndicated feed, agencies. Mid-day accepts no responsibility or liability for its dependability, trustworthiness, reliability and data of the text. Mid-day management/mid-day.com reserves the sole right to alter, delete or remove (without notice) the content in its absolute discretion for any reason whatsoever
