Here are 10 things to know on the Lakshmi Vilas Bank merger:
On Thursday, the Bombay High Court refused to stay Lakshmi Vilas Bank's merger with DBS Bank India, which was set to take effect the next day.
Refusing an interim relief as sought by petitioners on the proposed amalgamation, the court placed the matter for further hearing on December 14. It also directed the RBI and the government to file their responses by then.
A group of LVB and Indiabulls Housing Finance promoters had filed petitions challenging the merger. Indiabulls Housing is a shareholder of Lakshmi Vilas Bank. (Also Read: Lakshmi Vilas Bank Has Enough Liquidity To Pay Its Depositors: RBI-Appointed Administrator)
Banking union All India Bank Employees' Association (AIBEA), which represents about half a million bank employees, had also expressed reservations about the DBS deal, demanding a merger with a public sector lender instead.
The government on Wednesday gave its nod to the proposed merger, to protect the interests of LVB's depositors and employees. (Also Read: Crisis-Hit Lakshmi Vilas Bank's Merger With DBS India Cleared By Cabinet)
According to the merger plan, the entire paid-up equity capital of Lakshmi Vilas Bank will be written off, resulting in shareholders losing their investment.
Restrictions placed on withdrawals from LVB accounts earlier this month, on detection of serious deterioration in its financial health, were lifted from November 27. Now, all of LVB branches are set to function as part of DBS. (Also Read: RBI To Fold Lakshmi Vilas Bank Into Arm Of Singapore's DBS)
Trading in Lakshmi Vilas Bank shares was suspended on bourses BSE and NSE from November 26. (Also Read: Trading In Lakshmi Vilas Bank Shares Suspended)
Lakshmi Vilas Bank is the second private sector bank to run into rough weather this year, after Yes Bank.
In March, capital-starved Yes Bank was placed under a moratorium. The government rescued Yes Bank by asking state-run State Bank of India to infuse Rs 7,250 crore and take 45 per cent stake in the bank.
Post a comment