Lakshmi Vilas Bank is now history before independence. The bank finally ceased to exist on Friday after getting into a debt crisis. Laxmi Vilas Bank is to merge with DBS India, an Indian subsidiary of Singapore’s DBS Bank. The fate of the bank was decided on Wednesday at a Union Cabinet meeting chaired by Prime Minister Narendra Modi, when the government approved the seal of the merger with DBS. Reserve Bank of India announced on November 27 that it would merge with DBS Bank India Limited.
Laxmi Vilas Bank has been banned for a month and the burden of NPA
“All branches of Lakshmi Vilas Bank will function as DBIL branches from November 27,” the Reserve Bank said in a statement. However, there is now clarity for the bank’s depositors, but the bank’s promoters and investors have been disappointed. Lakshmi Vilas Bank has been asked to write down Tier-2 Basel-3 bonds worth Rs 318 crore before its merger with DBS India. The Reserve Bank has issued this notice in reference to Section 45 of the Banking Regulation Act. As a result, investors in these bonds suffered losses.
Lakshmi Vilas Bank’s money depositors are completely secure: RBI has appointed an administrator
In addition, the bank’s shares are being listed as per Lakshmi Vilas Bank Limited (DBS Bank India Limited) Scheme 2020. The manner in which Lakshmi Vilas Bank merged with a subsidiary of a foreign bank has been questioned by several stakeholders, including banking unions. He says the Reserve Bank has given the gift of Lakshmi Vilas Bank to a foreign company for free. DBS had previously tried to buy Lakshmi Vilas Bank. In 2018, DBS stepped in to buy a 50 percent stake. Then DBS was willing to invest Rs 100–150 per share.
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