The Reserve Bank of India has placed on 17 November 2020 in public domain a draft of amalgamation of the Lakshmi Vilas Bank Ltd. (LVB) with DBS Bank India Ltd. (DBIL), a banking company incorporated in India under Companies Act, 2013, and having its registered office at New Delhi.
DBIL is a wholly owned subsidiary of DBS Bank Ltd, Singapore (“DBS”), which in turn is a subsidiary of Asia’s leading financial services group, DBS Group Holdings Limited and has the advantage of a strong parentage. It has been issued a banking license to operate as a banking company under Section 22(1) of the Banking Regulation Act, 1949 on 4 October 2018. DBIL has a healthy balance sheet, with a strong capital support. It will bring in additional capital of ₹2500 crore upfront to support credit growth of the merged entity.
The Reserve Bank has invited suggestions and objections, if any, from members, depositors and other creditors of the transferor bank (LVB) and the transferee bank (DBIL), on the draft scheme. The draft scheme has also been sent to the transferor bank and the transferee bank for their suggestions and objections. The suggestions and objections will be received by the Reserve Bank up to 5.00 PM on November 20, 2020. The Reserve Bank will take a final view thereafter.
It may be recalled that the Lakshmi Vilas Bank Ltd. has been placed under an order of moratorium on November 17, 2020 which will be effective upto December 16, 2020.