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The amalgamation of LVB and the Indian unit of DBS was completed on November 27, 2020 after approval from the Reserve Bank of India.
The funds will be used by DBS Bank India to manage the mismatch arising out of erstwhile Lakshmi Vilas Bank's assets and liabilities, according to a news report.
DBS Bank India is well-capitalised, and its capital adequacy ratio (CAR) remains above regulatory requirements after the merger with Lakshmi Vilas Bank, DBS Bank said
The court, however, refused to intervene in the amalgamation of the bank with DBS.
As part of the scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank India, the Reserve Bank of India ( RBI) has directec the lender to also write off tier-2 bonds worth around Rs 320 crore
A day before the final scheme of amalgamation between Lakshmi Vilas Bank and DBS Bank India becomes effective, these promoter group entities of the ailing south India-based lender had initiated legal action against the Reserve Bank of India, the Union of India, and DBS Bank
As part of the scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank India, the Reserve Bank of India ( RBI) may soon move to also write off tier-2 bonds of the ailing lender worth around Rs 320 crore
The promoter group holds 6.80 per cent stake in Lakshmi Vilas Bank
All the branches of the Lakshmi Vilas Bank will function as branches of DBS Bank India from November 27.
Customers, including depositors of the LVB will be able to operate their accounts as customers of DBS Bank India with effect from November 27, 2020, the RBI said.
LVB was founded in 1926 by a group of businessmen in Karur in Tamil Nadu. The bank rose to prominence lending to small businesses. But, the fall came quick. Before it could complete a century of existence, the bank got knocked out by its own doing.
The government on November 25 cleared the final scheme for the amalgamation of LVB with DBS Bank India.
According to the draft scheme of amalgamation, the entire paid-up share capital of LVB would be written off after the transaction
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As part of the proposal, DBIL, the wholly owned subsidiary of Singapore-based DBS Bank, will inject Rs 2,500 crore into the merged entity to support its financial position. S&P said this deal is positive for India’s banking sector and will bring much-needed relief to LVB, which has been struggling for many years.
Small investors have repeatedly burnt their fingers by dabbling in troubled banks or penny stocks.
Lakshmi Vilas Bank was struggling for the last few years and it was reflected in its share price, too, but some investors bought the stock in the hope of making a killing from an expected revival but that has not been the case.
Shareholders of Lakshmi Vilas Bank have suggested other options for the resolution of the stressed lender, including a bidding process from prospective suitors.
Investors should choose only top-quality names with long track record of governance and impeccable managerial competence.
LVB administrator TN Manoharan said since the moratorium was clamped the bank saw only Rs 10 crore withdrawal through ATMs
Lakshmi Vilas Bank under a one-month moratorium, find out what it means here
Clix is a non-banking phenomenon, it works on a different set of rules and a bank has to be governed by the banking regulations and RBI requirements, Sinha said
Lakshmi Vilas Bank account holders can withdraw up to Rs 25,000, including outflows on SIPs and EMIs. Your money is safe. But change bank mandates soon. The merger with DBS Bank will smoothen things
According to the draft scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank India, the entire amount of the paid-up share capital will be written off. Some institutional investors Moneycontrol spoke to said they would consult legal experts before deciding on the way forward