NEW DELHI: The government on Wednesday approved merger of crisis-ridden Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd (DBIL) and removed restrictions on withdrawal of deposits by depositors.
The Union Cabinet has approved the merger of the LVB with DBS Bank India Limited, Union minister Prakash Javadekar told reporters, adding the decision will provide comfort to 20 lakh depositors and protect the services of 4,000 employees.
The step was taken on the advice of the Reserve Bank of India (RBI), in view of the declining financial health of the private sector lender.
LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March.
While Yes bank has successfully been revived under the guidance of State Bank of India (SBI), the PMC resolution is still a far cry.
Shares of LVB continued to face selling pressure for the seventh consecutive day and have tanked over 55 per cent during the period amid negative reports surrounding the company.
Since last Tuesday (November 17), the stock has tanked 55.59 per cent on the BSE index.
(With PTI inputs)