The Reserve Bank of India (RBI) has announced a draft scheme to amalgamate Lakshmi Vilas Bank with DBS Bank India Ltd (DBIL). The proposed scheme of amalgamation is under the special powers of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949.
Lakshmi Vilas Bank has a 94-year history in India, with established retail and SME customer base. The bank also has a strong presence in South India.
DBS history in India
DBS has been in India since 1994. In March 2008, the Singapore bank received approval to expand from 2 branches to 10 branches in India. Current DBS CEO, Piyush Gupta took over the reins in 2009, and since then they had seen In 2013, DBS opened its 10th branch in Salem, Tamil Nadu state. In March 2019, DBS converted its India operations to a wholly-owned subsidiary, DBIL. DBS had done so to expand the franchise and build a grander scale. DBIL is now present in 24 cities across 13 states. As of 2019, the Indian market accounts for less than 10 per cent of the group’s income. However, it is considered one of DBS’s six priority markets in Asia.
The proposed amalgamation will provide stability and better prospects to Lakshmi Vilas Bank’s depositors, customers and employees. This amalgamation could not come at a better time, following a period of uncertainty. At the same time, the proposed amalgamation will allow DBIL to scale its customer base and network, particularly in South India. The South Indian region of India has longstanding and close business ties with Singapore.
DBS will inject SGD 463 million into DBIL to support the amalgamation once the scheme is approved. The banks existing resources will fully fund the move.
DBS will await the final decision on the proposed scheme from RBI and the Government of India. The bank will announce further details at a later stage.
More details on the RBI announcement are available here.