- The cabinet approved the amalgamation of Lakshmi Vilas Bank (LVB) with the Indian arm of DBS Bank.
- RBI informs that the moratorium on the crisis-ridden bank will be lifted since the merger is slated to take effect on November 27, 2020 which is well before the originally scheduled date of 17th December 2020.
- Accordingly the restriction on Cash withdrawals by a depositor beyond Rs. 25,000 is also being lifted from 27th November 2020 and now LVB branches will operate as those of DBS Bank India (DBIL) wef 27th Nov 2020.
- As a part of amalgamation DBIL will infuse fresh capital of Rs. 2,500 crore into LVB.
- LVB’s paid up share capital will be written off and the shares and debentures of the bank will stand delisted upon the merger.
- Now DBSI which had only 33 branches operating in India will now have over 633 branches upon the merger
- The global rating agency Moody’s has estimated that DBS India customers’ deposits and Loans will increase by about 50-70% consequent upon the merger.
- According to Fitch Ratings, LVB’s balance sheet amounts to less than 1% of DBS’s risk weighted assets and equity.
- This means that it will not immediately affect the group’s asset quality, profitability or capitalization and inturn its credit ratings.
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