Lakshmi Vilas Bank investors to approach RBI to stop merger with DBS Bank

Lakshmi Vilas Bank

Shareholders of Lakshmi Vilas Bank have suggested other options for the resolution of the stressed lender, including a bidding process from prospective suitors.

India’s oil Firms To Consider Foreign Partners To Boost Production

Lakshmi Vilas Bank (LVB) investors are planning to approach the Reserve Bank of India to oppose its decision to merge the 94-year-old Chennai based lender with DBS Bank. As per the draft scheme of amalgamation of LVB with DBS Bank India, the entire amount of the paid-up share capital will be written off.

The Reserve Bank of India (RBI), on November 18, superseded the LVB board and placed the 94-year-old Chennai-based lender under a 30-day moratorium ending December 16.

After putting LVB on moratorium with withdrawals capped at Rs 25,000, the RBI announced a draft scheme for amalgamation of LVB and DBS India Ltd (DBIL) — the wholly-owned subsidiary of DBS Singapore.

Any move that hinders the principles of natural justice should be avoided, an institutional investor said, as quoted by The Print.

“The shareholders and investors have stood by the bank during its crisis period and their interest should also be protected. In fact, in several old generation private banks, many depositors are also the shareholders. Hence, we would urge RBI to reconsider the proposal of writing off the paid-up share capital and reserves, which would affect both retail and institutional shareholders of the bank,” the investor said seeking anonymity.

Gold prices may remain choppy in near term, say analysts