New Delhi: Days after RBI proposed a scheme to merge the two banks, the Union Cabinet on Wednesday approved the amalgamation of Lakshmi Vilas Bank with DBS Bank India. An announcement to this effect was made by Union Minister Prakash Javadekar.

Addressing a press conference, Javadekar said that the Centre has approved the scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank India Limited. “With this, there’ll be no further restrictions on depositors regarding the withdrawal of their deposits,” he said.

The Union Minister said that the Centre has asked the RBI to take action against the people in the management who drives banks to the brink of collapse.

He further added that the Centre has also approved equity infusion of Rs 6000 crores in NIIF Debt Platform sponsored by National Investment and Infrastructure Fund, comprising of Aseem Infrastructure Finance Limited and NIIF Infrastructure Finance Limited.

Earlier this month, the Reserve Bank of India (RBI) had proposed the Centre 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The RBI has also placed the Lakshmi Vilas Bank under moratorium for 30 days and superseded its Board owing to serious deterioration in the lender’s financial position. TN Manoharan, a former Non-Executive Chairman of Canara Bank, has been appointed as the Administrator of the bank.

He RBI had said that the DBS Bank 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

The Reserve Bank has invited suggestions and objections, if any, from members, depositors and other creditors of transferor bank (LVB) and transferee bank DBS Bank India on the draft scheme, which may be sent to the address mentioned in the “Notice”.