RBI has given a decision on withdrawal of Tier-2 Debt worth Rs. 320 crores of LVB Bondholders consequent upon the merger of Lakshmi Vilas Bank with DBS India.
- LVB bondholders questions the Reserve Bank of India move to write off tier-2 debt worth Rs. 320 crores they hold as part of the rescue by DBS Bank India Ltd.,
- They inform that this had not been part of the final scheme of amalgamation which clearly stated that DBS India will take over all liabilities unless mentioned otherwise.
- The bondholders have threatened to go to court.
- The bondholders inform that the original scheme was silent on any write-down tier-2 bonds.
- RBI’s sudden decision has shocked them. Hence they propose to join the petition by shareholders in the Madras High Court by the middle of next week.
- They feel that RBI has not thoroughly this matter before writing down these bonds since it is well within the affordability of DBS Bank to pay this sum.