Reserve Bank of India must reconsider the move to let DBS Bank take over Lakshmi Vilas Bank (LVB), said H. Adi Seshan, State convenor of Swadeshi Jagran Manch, an affiliate of the Rashtriya Swawamsevak Sangh.
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Speaking to reporters here on Friday, he said there had been 81 bank mergers since 1961. After nationalisation, 34 private sector banks were merged – 26 of these with public sector banks and eight with other private banks. There was not a single case of merging an Indian bank with a foreign entity. Why was LVB being merged with a foreign bank, Mr. Adi Seshan asked and wondered whether it was the new policy of the RBI. The fundamental policies should not be changed without debate and it was contrary to the Atmanirbhar Bharat initiative of the Prime Minister.
When the RBI-appointed administrator for the bank had informed that the deposits were safe and that they had adequate liquidity, the takeover by an overseas entity was baffling. The LVB had been maintaining a long-standing association and deep community links since 1926.
The RBI could raise funds for the LVB and bring it back to healthy functioning as it did for a YES Bank. The RBI had resolved the matter of recapitalisation with contributions from SBI, LIC, HDFC, ICICI, Kotak and others to the tune of ₹12,000 crore.
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Moreover, it has been reported that the DBS had proposed to inject ₹2,500 crore in its own Indian subsidiary to increase its capital to absorb the LVB. Without paying any price for acquisition, the DBS was gaining access to the LVB’s deposits reported to be over ₹20,000 crore would not be acceptable, Mr. Adi Seshan said and appealed to the Centre to reconsider the proposal.