The Reserve Bank of India (RBI) has proposed a merger of Lakshmi Vilas Bank with DBS Bank India Ltd. DBS Bank India Ltd is a pre-owned subsidiary of DBS Bank Limited, Singapore. The proposal is made after the RBI placed Lakshmi Vilas Bank under a 30-day moratorium. The central bank has decided to take the bank's board under its control citing the deterioration of the bank's financial position. Along with this, TN Non Manoharan, former non-executive chairman of Canara Bank, has been appointed as the bank's administrator.
According to RBI, DBS Bank is a subsidiary of Singapore Asia's premier financial services group DBS Group Holdings Ltd and in that sense the bank is in a very strong position.
The central bank said in a statement that the balance sheet of DBS Bank India is very good and the company has very good capital. The central bank has reported that the total regulatory capital of the bank stood at Rs 7,109 crore as on June 30, from Rs 7,023 crore as on March 31.
The Reserve Bank has asked members, depositors, creditors of Laxmi Vilas Bank and DBS Bank to lodge suggestions and objections to the proposal.
Earlier, the Central Government imposed Moratorium on Laxmi Vilas Bank on 17 November, which will remain in effect till 16 December. With this decision has been taken, under which the customers of the bank will not be able to withdraw more than Rs 25,000 till December 16.