Depositors Need Not Worry About LVB-DBS Merger

After the failure of IL&FS, PMC Bank and DHFL, and the bailout of Yes Bank, RBI has decided to impose a 30-day moratorium and issued a draft scheme for amalgamation of capital-starved Lakshmi Vilas Bank (LVB) with DBS India, a subsidiary of DBS Singapore. The foreign bank is expected to bring capital worth Rs 2,500 crore to support credit growth. According to RBI, the financial position of LVB has undergone a steady decline over the last three years. The bank posted a net loss of Rs 397 crore in the September quarter of FY21. Its NPA stood at 25.4 per cent of its advances as of June 2020 as against 17.3 per cent a year ago. RBI capped withdrawals at Rs 25,000 a month ago, and this has raised concern among depositors, who claim the amount might not be enough in taxing times. T N Manoharan, the RBI-appointed administrator of LVB, assured that depositors’ money is...