The Reserve Bank of India on Wednesday informed that Lakshmi Vilas Bank and DBS Bank India merger will be effective from November 27.
All the branches of the Lakshmi Vilas Bank Ltd. will function as branches of DBS Bank India Ltd. with effect from November 27.
Customers, including depositors of the Lakshmi Vilas Bank Ltd., will be able to operate their accounts as customers of DBS Bank India Ltd. Consequently the moratorium on the Lakshmi Vilas Bank Ltd. will cease to be operative from that date.
Now, DBS Bank India Ltd. is making necessary arrangements to ensure that service, as usual, is provided to the customers of the Lakshmi Vilas Bank Ltd.
Earlier, LVB was placed under moratorium till December 16 with the RBI placing a withdrawal cap of Rs 25,000 on depositors during this period. This limit will apply to more than one account maintained by the depositor.
However, depositors are allowed to withdraw more than Rs 25,000 with permission from the RBI for purposes such as medical treatment, payment of higher education and marriage expenses.
The RBI was left with little room to manoeuvre, given the erosion of the bank’s net worth – which has been in a steady decline over the last three years – absence of any viable strategic plan, declining advances and mounting non-performing assets.