Union Cabinet has approved the merger of capital-starved Lakshmi Vilas Bank (LVB) with DBS Bank India. The Reserve Bank of India on 17 November proposed the merger of the lender with the Indian arm of Singapore’s DBS Bank.
The 94-year-old LVB will now cease to exist and its equity completely wiped out. Its deposits will now be on the books of DBS India. Lakshmi Vilas is the second bank to need a rescue this year, and the third collapse of a major deposit-taking institution in 15 months and the first since the onset of the coronavirus pandemic.
As part of the amalgamation, DBIL will infuse fresh capital of Rs 2,500 crores into LVB. This also marks the first instance when India has turned to a foreign entity to bail out a struggling domestic bank. Under the deal, DBS got 563 branches, 974 ATMs and a $1.6 billion franchise in retail liabilities. Earlier, the RBI had placed LVB under a one-month moratorium till December 16, during which withdrawals for depositors have been capped at Rs 25,000.
About DBS Bank:
DBS was the first foreign bank to receive a banking licence after the central bank allowed foreign banks to set up a wholly-owned subsidiary in 2014. “With DBS likely to use digital capabilities to enhance its physical footprint in India, the proposed deal could lead to a 30-40% increase in Indian assets of DBS.
Important takeaways for all competitive exams:
India has a rich history of medicine and healing. During the British rule, becoming a…
India became a free and independent country in 1947, and later in 1950, it became…
Rongali Bihu, also known as Bohag Bihu, is being celebrated across Assam in mid-April 2025,…
After India got independence in 1947, the country needed strong leaders to help build a…
Akarsh Shroff, the founder of YuvaSpark, was conferred the National Youth Award on April 3,…
Veteran actor Ravikumar, widely known for his romantic roles in Malayalam and Tamil films during…