DBS Group To Infuse Rs 2,500 Crore In DBS India
DBS Group to infuse Rs 2,500 crore in DBS India for the merger of Lakshmi Vilas Bank, know the important things related to this proposed merger.
Singapore’s DBS Group will infuse Rs 2,500 crore in DBS Bank India for the proposed merger of the cash-strapped Lakshmi Vilas Bank (LVB).
The government on Tuesday placed Lakshmi Vilas Bank under a 30-day moratorium.
Subsequently, the Reserve Bank of India (RBI) announced the draft scheme to merge the cash-strapped Lakshmi Vilas Bank into DBS Bank India Ltd (DBIL).
DBS India has said in a release that this proposal for the merger has come under the exclusive right of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949.
This proposed merger will provide stability to customers, depositors and employees of Lakshmi Vilas Bank.
DBS India has said that this merger will help DBIL to expand its customer base and network in the country and especially in South India. It is noteworthy that South India has a close business relationship with Singapore.
DBS has said, “DBS will put Rs 2,500 crore into DBIL if the scheme is approved to support this merger.” This capital will be infused from existing sources of DBS. ”
It has said that DBS will wait for the final decision of RBI and the Government of India on this proposed scheme and detailed details will be released later.
A month-long moratorium has been imposed on LVB and its board has been taken over by the Reserve Bank.
At the same time, customers of the bank will not be able to withdraw more than Rs 25,000 from the bank during the moratorium period.
In view of the deteriorating financial health of Laxmi Development Bank, the Government of India has decided in this regard on the advice of the Reserve Bank.
LVB has been active in India for 94 years and the bank’s position in the retail and SME banking sector has been very strong. On the other hand, DBS has been active in India since 1994.
