Hours earlier, the government approved LVB’s merger with DBS Bank and removed restrictions on the withdrawal of deposits by account holders.
“The merger will come into effect on the appointed date, ie November 27. All branches of Lakshmi Vilas Bank Ltd will function as branches of DBS Bank India Ltd. with effect from this date,” the central bank said.
Consequently, the bank’s clients will be able to operate their accounts as clients of DBS Bank India Ltd from November 27.
DBS Bank India Ltd is making the necessary arrangements to ensure that the service, as usual, is provided to Lakshmi Vilas Bank Ltd customers, the RBI said.
On November 17, the government, on the advice of the RBI, imposed a 30-day moratorium on the crisis-ravaged LVB that restricts cash withdrawals to Rs 25,000 per depositor.
The RBI simultaneously placed in the public domain a draft merger scheme of LVB with DBIL, a banking company incorporated in India under the Companies Act 2013, with its registered office in New Delhi.
The Reserve Bank also replaced LVB’s board of directors and appointed TN Manoharan, former non-executive chairman of Canara Bank, as administrator of the bank for 30 days.
LVB is the second private sector bank after Yes Bank, which has faced bad weather this year. In March, Yes Bank, starved for capital, was subjected to a moratorium. The government bailed out Yes Bank by asking the State Bank of India (SBI) to inject 7,250 crore rupees and take a 45 percent stake in the bank.
(With contributions from the agency)
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