Lakshmi Vilas Bank has now merged with DBS Bank India Ltd (DBIL), the wholly owned subsidiary of DBS Group Holdings Ltd, DBS Bank India said in a statement.
The merger of LVB into DBS Bank India came into effect on November 27 under the special powers of the government and the Reserve Bank of India under Section 45 of the Banking Regulation Act of 1949.
The merger provides stability and better prospects for LVB’s depositors, clients and employees after a period of uncertainty. The moratorium imposed on LVB was lifted on November 27 and banking services were immediately restored with all branches, digital channels and ATMs operating as usual.
“LVB Clients you can continue to access all banking services. Interest rates on savings bank accounts and fixed deposits are governed by the rates offered by the old LVB until further notice, “said DBS Bank.
All LVB employees will continue in service and are now DBIL employees under the same terms and conditions of service as under LVB, he added.
The Indian branch of DBS Singapore said its team is working closely with LVB colleagues to integrate LVB’s systems and network into DBS over the next few months.
Once the integration is complete, clients will be able to access a wider range of products and services, including access to DBS’s full suite of digital banking services that have earned multiple global accolades, he added.
DBIL CEO Surojit Shome said: “The LVB merger has allowed us to bring stability to LVB depositors and employees. It also gives us access to a broader set of clients and cities where we currently have no presence.”
He added that the bank looks forward to working with its new colleagues to become a strong banking partner for LVB’s client.
The bank said it is well capitalized and its capital adequacy ratio (CAR) will remain above regulatory requirements even after the merger.
In addition, DBS Group will inject Rs 2,500 crore (SGD 463 million) into DBIL to support the merger and for future growth. This will be fully funded from existing DBS Group resources.
DBS has been in India since 1994 and converted its Indian operations into a wholly owned subsidiary, DBIL, in March 2019.
On November 17, a 30-day moratorium was imposed on the crisis-stricken LVB restricting cash withdrawals to Rs 25,000 per depositor.
The Reserve Bank of India (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.
LVB is the second private sector bank after Yes Bank to have encountered bad weather this year. In March, Yes Bank, starved for capital, was placed under a moratorium.
The government bailed out Yes Bank by asking the state-owned State Bank of India to inject 7,250 crore and take a 45 percent stake in the bank.
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