Crisis-hit Lakshmi Vilas Bank (LVB) will merge into the Indian arm of Singapore-based DBS Bank on Friday, leading to removal of all restrictions, including withdrawal cap of Rs 25,000, which the RBI had placed on the lender earlier this month.
The RBI notified the effective date of merger soon after the Union Cabinet headed by Prime Minister Narendra Modi approved the Scheme of Amalgamation of LVB with DBS Bank India Ltd (DBIL).
All the branches of LVB will function as branches of DBIL with effect from November 27, the Reserve Bank of India (RBI) said in a statement.
“Customers, including depositors of the Lakshmi Vilas Bank Ltd will be able to operate their accounts as customers of DBS Bank India Ltd (DBIL) with effect from November 27, 2020. Consequently the moratorium on the Lakshmi Vilas Bank Ltd. will cease to be operative from that date,” it said.
DBIL is making necessary arrangements to ensure that service, as usual, is provided to customers of LVB, the central bank added.The RBI had superseded LVB’’s board on November 17 after the private sector lender was placed under a moratorium.Meanwhile, the government issued a gazette notification which notified the Lakshmi Vilas Bank Limited (Amalgamation with DBS Bank India Limited) Scheme, 2020.
All employees of LVB shall continue in service and be deemed to have been appointed at the same remuneration and on the same terms and conditions of service as were applicable immediately before the close of business on November 17, 2020, the gazette notification issued by the Department of Financial Services said.
Earlier in the day, the Union Cabinet approved the merger of LVB with DBIL, providing comfort to 20 lakh customers of the bank which was put under the moratorium.
