The Union Government on Wednesday approved the merger of the bank with DBS Bank India Ltd. The moratorium period on the bank ends on Thursday.

Lakshmi Vilas Bank to cease to exist to be merged into DBS Bank
Money Banking Thursday, November 26, 2020 - 10:31

The National Stock Exchange (NSE) has said that it will suspend trading on the shares of the Lakshmi Vilas Bank (LVB) with effect from Thursday. The development comes after the Union Cabinet on Wednesday approved the merger of the bank with DBS Bank India Ltd. The moratorium period on the bank ends on Thursday. From November 27, the 94-year-old Karur-headquartered LVB will cease to exist officially and be amalgamated with DBS Bank India Ltd, a subsidiary of DBS Bank, Singapore.

"In pursuance of Regulation 3.1.2 of the National Stock Exchange (Capital Market) Trading Regulations Part A, it is hereby notified that the following security will be suspended from trading w.e.f. November 26, 2020 (i.e. closing hours of trading on November 25, 2020)," the NSE said in a circular referring to Lakshmi Vilas Bank.

Bombay Stock Exchange too, suspended trading of the bank’s shares. “Trading members of the Exchange are hereby informed that, Lakshmi Vilas Bank Ltd has now informed that pursuant to the Scheme of Amalgamation as notified by The Government of India after consultation with the Reserve Bank of India, has sanctioned the Scheme of Amalgamation providing for Amalgamation of Lakshmi Vilas Bank Ltd (Transferor  Bank) into DBS Bank India Ltd,” the exchange said in a circular.

“In view of the above intimation, the equity shares of Lakshmi Vilas Bank Ltd shall not be available for Trading  w.e.f. Thursday, 26th November, 2020  (DR -167/2020 – 2021). Trading Members of the Exchange and Market Participants are requested to note the same,” it added.

In a statement, the Reserve Bank of India said that the amalgamation will come into force on November 27. All the branches of the Lakshmi Vilas Bank Ltd will function as branches of DBS Bank India Ltd with effect from this date, it said.

"Customers, including depositors of the Lakshmi Vilas Bank Ltd. will be able to operate their accounts as customers of DBS Bank India Ltd with effect from November 27, 2020. Consequently, the moratorium on the Lakshmi Vilas Bank Ltd. will cease to be operative from that date. DBS Bank India Ltd is making necessary arrangements to ensure that service, as usual, is provided to the customers of the Lakshmi Vilas Bank Ltd," said the RBI statement.

On Wednesday, the LVB's shares on the NSE closed at Rs 7.65, higher by 4.79 per cent from its previous close.

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