Union Cabinet has accepted 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 stop to exist and its fairness fully worn out. Its deposits will now be on the books of DBS India. Lakshmi Vilas is the second financial institution to want a rescue this 12 months, and the third collapse of a significant deposit-taking establishment in 15 months and the primary because the onset of the coronavirus pandemic.
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As a part of the amalgamation, DBIL will infuse recent capital of Rs 2,500 crores into LVB. This additionally marks the primary occasion when India has turned to a international entity to bail out a struggling home financial institution. Under the deal, DBS obtained 563 branches, 974 ATMs and a $1.6 billion franchise in retail liabilities. Earlier, the RBI had positioned LVB beneath a one-month moratorium until December 16, throughout which withdrawals for depositors have been capped at Rs 25,000.
About DBS Bank:
DBS was the primary international financial institution to obtain a banking licence after the central financial institution allowed international banks to arrange a wholly-owned subsidiary in 2014. “With DBS doubtless to make use of digital capabilities to reinforce its bodily footprint in India, the proposed deal may result in a 30-40% enhance in Indian property of DBS.
Important takeaways for all aggressive exams:
- Managing Director & CEO of DBS Bank India Ltd: Surojit Shome.
- DBS Bank India Limited Headquarters: Mumbai, Maharashtra.
- DBS Bank India Limited Established: 2014.
- Lakshmi Vilas Bank Headquarters: Chennai, Tamil Nadu.
- Lakshmi Vilas Bank Founded: 1926.
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