Chennai: The Reserve Bank of India (RBI) on Tuesday proposed a draft scheme of amalgamation of the beleaguered Lakshmi Vilas Bank with DBS Bank India Ltd, a wholly-owned subsidiary of DBS Bank Ltd, Singapore.
The RBI has also placed the Lakshmi Vilas Bank under moratorium for 30 days and superseded its Board owing to serious deterioration in the lender’s financial position. T.N. Manoharan, a former Non-Executive Chairman of Canara Bank, has been appointed as the Administrator of the bank.
According to the RBI, DBS Bank, Singapore is a subsidiary of Asia’s leading financial services group, DBS Group Holdings Ltd, and thus, has the advantage of a strong parentage.
In a statement, the apex bank said DBS Bank India has a healthy balance sheet, with strong capital support.
As on June 30, its total regulatory capital was Rs 7,109 crore (against capital of Rs 7,023 crore as on March 31).
As on June 30, its gross non-performing assets (GNPA) and net NPA (NNPA) were low at 2.7 per cent and 0.5 per cent, respectively; Capital to Risk Weighted Assets Ratio (CRAR) was comfortable at 15.99 per cent (against requirement of 9 per cent); and Common Equity Tier-1 (CET-1) capital at 12.84 per cent was well above the requirement of 5.5 per cent.
Although the DBS Bank India is well capitalised, it will bring in additional capital of Rs 2,500 crore upfront, to support credit growth of the merged entity.
