Lakshmi Vilas Bank (LVB) has ceased to exist and is now amalgamated with DBS Bank India Limited (DBIL). The moratorium was lifted on November 27, and DBIL said in a statement that banking services were restored immediately with all branches, digital channels and ATMs functioning as usual, and customers now have access all banking services.
DBIL has said the interest rates on savings bank accounts and fixed deposits are currently the same as what LVB was offering until further notice. This comes after concerns were raised over the interest rates of LVB account holders being reduced post the amalgamation as DBIL’s interest rates are lower than that of LVB.
All LVB employees too, it said, will continue in service and are now employees of DBIL on the same terms and conditions of service as under LVB.
Earlier this month, the union government put LVB under a moratorium for a month, hours after which RBI proposed the amalgamation of LVB with DBIL. This was cleared by the union cabinet last week.
The scheme of amalgamation is under the special powers of the Government of India and Reserve Bank of India under Section 45 of the Banking Regulation Act, 1949, India, and came into effect on 27 November 2020.
DBIL said in a statement that the DBS team is working closely with LVB colleagues to integrate LVB’s systems and network into DBS over the coming months.
“Once the integration is complete, customers will be able to access a wider range of products and services, including access to the full suite of DBS digital banking services which have won multiple global accolades,” the company added.
DBS Bank India Limited (DBIL) has assured all account holders and depositors that the bank is well-capitalised, and its capital adequacy ratios (CAR) will remain above regulatory requirements even after the amalgamation.
Additionally, DBS Group will inject Rs 2,500 crore into DBIL to support the amalgamation and for future growth. This will be fully funded from DBS Group’s existing resources.
Surojit Shome, CEO of DBS Bank India Limited, said, “The amalgamation of LVB has enabled us to provide stability to LVB’s depositors and employees. It also gives us access to a larger set of customers and cities where we do not currently have a presence. We look forward to working with our new colleagues towards being a strong banking partner to LVB’s clients.”