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Singapore's DBS completes takeover of Lakshmi Vilas Bank

By Reuters

  • 30 Nov 2020
Singapore's DBS completes takeover of Lakshmi Vilas Bank
Credit: Reuters

Singapore’s DBS Group said on Monday it had completed its takeover of distressed Lakshmi Vilas Bank, helping it shift from a largely digital presence in India to having hundreds of branches.

The 94-year old Chennai-based private bank was folded into DBS’s Indian subsidiary at the request of the Reserve Bank of India which cited a serious deterioration in its finances.

Southeast Asia’s largest lender, which will pump in 25 billion rupees ($338 million) into its India unit, until recently had just over 30 branches in India but has now added more than 550 and 900-plus ATMs.

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Rebranding of LVB branches has begun and ATM screens have also been reconfigured to reflect DBS’s logo, according to a source familiar with the matter who added the exercise is likely to be completed within a week.

The source declined to be identified as the information was not public. DBS India did not immediately respond to a request seeking comment on the rebranding.

DBS confirmed it will continue to employ some 4,000 LVB staff.

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The takeover has, however, not been smooth sailing for LVB bondholders, after the lender was asked by the central bank last week to completely write down Basel III-compliant tier 2 bonds worth 3.20 billion rupees.

“RBI has set a precedence with the proposed write off as it first time a Tier II bond is being written off,” said Anil Gupta, an analyst at credit rating agency ICRA.

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