Lakshmi Vilas Bank – DBS Merger is Really Scandalous, Know Why ?

December 04, 2020

BJP leader and top politician, Sri Subramanian Swamy blames RBI Governor Shakti Kanta Das for the shoddy deal of Lakshmi Vilas Bank – DBS Merger.

Swamy writes to the PM, requests a CBI probe on the actions of RBI officials and Governor in this LVB-DBS merger deal. BJP leader Subramanian Swamy demanded a forensic audit of assets of the LVB and probe on the role of RBI officials including Governor Shakti Kanta Das.

In a detailed three page letter to Prime Minister Narendra Modi, the BJP leader said that just 72 hours were given to shareholders of Lakshmi Vilas Bank (LVB) to respond to the merger plan with DBS, which is facing money laundering charges in home country Singapore and by various US agency reports.

Also Read - RBI IWG Proposals - Banks Union Threatens For Strike

Observations

1. LVB is about 20 times larger than DBS in all dimensions of banking.

2. LVB branches around India are about 550 in number.

3. On the close of business hours on November 17, 2020, the RBI put out a draft amalgamation scheme by which the entire assets of LVB were to be transferred to DBS Bank.

4. In consideration for the above transfer of assets, DBS was to take over only the deposits of LVB.

5. Further, the draft scheme envisaged that the entire bond and shares of LVB would be written off.

As per Mr Swamy, this was incredible as may it sound and a scandal in itself, he pointed that that in 72 hours, RBI approved the merger without giving time for share and bondholders to respond.

Subramanian Swamy said that the CBI probe must be ordered on the actions of RBI officials in this deal and Governor must be packed to indefinite leave till the investigations over.

He accused that RBI ignoring the interests of shareholders and bondholders of LVB invariably parallels with the 2G Spectrum Scam. Swamy also said that allowing a Singapore based bank to take over Lakshmi Vilas Bank is totally against the principles of ‘Aatma Nirbhar’ and suggested that PSU banks should be asked to take over LVB having more than 550 branches and 990 ATMs across the country.

He also accused that DBS’ major shareholders are involved in Islamic Banking in various countries and faced charges of money laundering by many international agencies.

The detailed letter of Subramanian Swamy is published below this article. Earlier Swamy raised objections on the move of the controversial finance company Indiabulls taking over LVB and RBI later shelved the proposal facing series of complaints.