The top priority now is to ensure that the scheme of amalgamation is completed smoothly, said T N Manoharan, the RBI-appointed Administrator of Lakshmi Vilas Bank.
During a conference call, he said, DBS Bank India is well capitalised to manage the merger.
Manoharan said even without the additional capital infusion proposed by DBS Bank India, the merged entity will continue to be well capitalised. The additional capital of Rs 2,500 crore being brought upfront will augment resources of the merged bank and help in growth.
He said the priority is to help customers to be able to withdraw within the permissible limits. RBI has approved that withdrawals of up to Rs 5 lakh in emergency situations.
"There is no need to panic. Our priority is to protect the interest of depositors and revitalise the bank through amalgamation," he said.
He said that in order to regenerate confidence among the bank's employees, it is essential that that their interests are taken care of under the amalgamation plan. Their remuneration and employment contracts will continue as before, he added. The lender has some 4,100 staff across 563 branches.
Manoharan refused to comment on how equity shareholders will be treated since the scheme is only in the draft stage.
The new management will have to take up further issues with the bank's operations and decide on how to resolve them.
Manoharan said the Banking Regulations Act will supersede the Companies ACt in this situation and shareholders' nod will not be required to list the shares.
"LVB has been going through testing times. We are confident the resolution will be in place before the deadline of December 16," Manoharan said, adding that decline in asset quality, high slippages were responsible for Q2 loss.
He added that deposits marginally dropped to about Rs 20,050 crore from Rs 20,973 crore at the end of September, while advances were up marginally to Rs 17,000 crore from Rs 16,620 crore.
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