- What does the merger of LVB with DBS Bank (Indian Operations) mean? This will obviously help the latter expand its footprint in the country.
- Though DBS is present in India for over 26 years, as a subsidiary of the main DBS Bank in Singapore in our country, the bank has had a largely limited presence. However, it has ramped up its digital presence significantly. The bank has a digi-banking platform and has been announcing a number od digital innovations, which includes digital business loans for small and medium enterprises (SMEs).
- The bank has its presence in 24 cities and has been ken on ramping up its operations and expanding its customer base. They are interested in focusing more on SMEs and retail customers as well as expanding into Tier-II and below cities.
- More significantly soon after the announcement by RBI of the proposed amalgamation, DBS said it will inject Rs. 2,500 crore into DBS Bank India (DBIL) if the scheme is approved. This amount will be fully funded from DBS’s existing resources.
- DBS Bank India has a strong balance sheet which also gives a comfort level to depositors of stressed Lakshmi Vilas Bank. DBS Bank India had reported an over six fold increase in its net profit to Rs. 111 crore in 2019-20 with gross NPAs at 2.6 per cent. RBI had sought the bank’s comments on proposed amalgamation. LVB has a more extensive network with 563 branches, five extension counters, around 974 ATMs and CDMs in about 16 States and 3 Union Territories. LVB reported a net loss of Rs. 396.99 crore during the second quarter this fiscal against a net loss of Rs. 357.17 crore in the corresponding period last fiscal. Its Gross NPA stood at 24.45 percent as on September 20 as against 21.25 per cent a year ago.
- Auditor’s note with the second quarter result had read that there is requirement to augment the bank’s capital base in the year 2020-21 and the deposit base had declined considerably since September 2019 and also there was a high increase in the NPA ratio. Above all, its Tier-I capital ratio also had turned negative.
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