Questions raised on RBI’s decision to amalgamate LVB with DBS Bank India

By Venkatachari Jagannathan Chennai, Nov 18 : The decision of Reserve Bank of India (RBI) to palm off 94-year-old Karur based Lakshmi Vilas Bank (LVB) to DBS Bank India Ltd, a wholly-owned subsidiary of DBS Bank Ltd, Singapore, smacks of arbitrariness and lack of transparency, said a top leader of All India Bank Employees’ Association (AIBEA).
“There would have been several groups interested in LVB with its extensive branch network and deposit base. The RBI did not make any open bid for LVB. From where DBS Bank India came in and how RBI zeroed in on that bank is not known,” C.H.Venkatachalam, General Secretary, AIBEA told IANS.
On Tuesday, the RBI announced its decision to amalgamate the LVB with the DBS Bank India.
Venkatachalam said as per RBI, DBS Bank India will bring in additional capital of Rs 2,500 crore upfront, to support business growth of the merged entity but there are no timelines mentioned.
“The fundamental question is why only DBS Bank India and why not others? Why no bids were issued? It is agreed that RBI may have powers, but those powers should be exercised in a transparent manner and not arbitrarily,” Venkatachalam said.
He charged RBI of handing over LVB to DBS Bank India overnight in an arbitrary manner.