New Delhi: The Centre on Wednesday approved the merger of Chennai-based Laxmi Vilas Bank with the Indian subsidiary of Singapore’s DBS, Union Minister Prakash Javadekar said.
A probe was on and the blame for the LVB’s collapse is yet to be fixed, he said at a press briefing after Cabinet decisions.
On November 15, the Reserve Bank of India (RBI) had taken over LVB due to a “serious deterioration” in its finances and temporarily capped withdrawals from the lender, which was looking for a partner since 2019 embattled as it was due to mounting bad loan and governance issues.
The amalgamation is in the interest of LVB employees, customers, and investors, the Minister said.
“The government has asked the RBI to take action against those in the management who drove the bank to the brink of collapse. Their liability has to be fixed,” Javadekar said.
With the merger approved, there will be no further restrictions on depositors regarding the withdrawal of their deposits.
The RBI’s proposed plan would give the Singaporean bank’s expansion ambitions a fillip as it would vastly increase the footprint of DBS in India, where it only has around 30 branches, media reports said.
LVB, on the other hand, has a vast network of more than 550 branches and over 900 ATMs across India, which would enlarge operations of DBS India.
(VP)