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Chennai, Terming the handing over of the 94-year-old Karur-based Lakshmi Vilas Bank (LVB) to DBS Bank India Ltd without inviting any open bids as "<keyword id="46353" type="PERSON" weightage="20" keywordseo="Match-fixing">match fixing</keyword>", a major union in the banking sector, however, welcomed the government's decision to fix liability on <keyword id="10331723" type="UNKNOWN" weightage="20" keywordseo="LVB-board-members">LVB board members</keyword> for wrong doings. The Union Cabinet, chaired by Prime Minister Narendra Modi, on Wednesday gave its approval to the Scheme of Amalgamation of LVB with DBS Bank India. Reacting to the Cabinet's decision, All India Bank Employees' Association (AIBEA) General Secretary C.H.Venkatachalam told IANS: "It is like match fixing in favour of DBS Bank India. The government's decision was not in the interests of the country and proves the favours shown to foreign capital." However, Venkatachalam welcomed the announcement made by <keyword id="3198120" type="PERSON" weightage="20" keywordseo="Union-minister-Prakash-Javadekar">Union Minister Prakash Javadekar</keyword> on fixing of liability on board members of LVB for wrong doings. "This is one of the efforts of cleaning up the banking sector," Javadekar told media while briefing about the Cabinet decisions, adding that the interests of LVB's 20 lakh depositors, ₹ 20,000 crore deposits and 4,000 employees has been secured. Venkatachalam said: "We welcome that decision. But the role of the Reserve <keyword id="6355303" type="DOMAIN" weightage="20" keywordseo="bank-of-india">Bank of India</keyword>'s (<keyword id="30067" type="COMPANY" weightage="20" keywordseo="RBI">RBI</keyword>) directors on the board of LVB should also be probed." P. Ramanujam, a retired Deputy General Manager of Dena Bank, told IANS: "After every board meeting of a bank, the RBI's nominee directors have to submit a report to the central bank on the happenings in the board meeting. The RBI nominees on LVB board must have filed their reports. It has to be seen what they had filed." On November 17, the government, acting on the RBI's application, has placed the LVB under moratorium for a period of 30 days to protect the interest of LVB depositors. In parallel, the RBI, in consultation with the government, superseded the Board of Directors of the LVB and appointed an Administrator to protect the depositors' interest. The RBI's decision was opposed by many as it did not seek other suitors for LVB through an open bid though a couple of private banks showed interest. As per the draft amalgamation scheme, the RBI has said that on and from the appointed date, the entire amount of the paid-up share capital and reserves and surplus, including the balances in share/securities premium account of the transferor bank (LVB), shall stand written off. On and from the appointed date, the transferor bank shall cease to exist by operation of the scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank (DBS Bank India) or order from any authority. As result, the shareholders of LVB will not get anything as sale consideration.

Banking union head demands that RBI nominees on LVB board should also be held liable

<ul><li>India’s <keyword id="6355512" type="ORGANIZATION" weightage="20" keywordseo="union-cabinet">Union Cabinet</keyword> has approved the merger of the troubled <keyword id="135860" type="COMPANY" weightage="20" keywordseo="Lakshmi-Vilas-Bank">Lakshmi Vilas Bank</keyword> (LVB) with <keyword id="133737" type="CITY" weightage="20" keywordseo="DBS-Bank">DBS Bank</keyword> India.</li><li>“This is a part of the clean up that was required in the banking sector,” said Union Minister <keyword id="119642" type="PERSON" weightage="20" keywordseo="Prakash-Javadekar">Prakash Javadekar</keyword> during the press conference.</li><li>He also revealed that the members of the board, who have now been removed, will be held accountable and there will be liability for those found to have made mistakes. </li></ul>The merger of the troubled Lakshmi Vilas Bank (LVB) with DBS Bank India has been approved by the <keyword id="44734" type="ORGANIZATION" weightage="20" keywordseo="Indian-Government">Indian government</keyword>’s Union Cabinet. Union Minister Prakash Javadekar said the ₹20,000 crore deposit of the 20 lakh customers is now safe. “Customers need not rush to banks to withdraw their money. However, whoever does wish to withdraw can now do so at any time in a safe way,” he said during the press conference. He also revealed that those members of the board who were responsible for the mistakes will be held accountable. “Those who have made mistakes, will be punished. There will be improvement in overall oversight also so as not to repeat such incidents in the future,” Javadekar explained. Resolving the LVB crisis On the fateful night of November 17, <a href="https://www.businessinsider.in/finance/news/lakshmi-vilas-bank-under-moratorium-rbi-caps-maximum-deposit-or-withdrawal-at-25000/articleshow/79267116.cms">LVB was put under a one-month moratorium</a> with withdrawals capped at ₹25,000 per account holder by the Reserve Bank of India (RBI). India’s apex bank also announced that due to lack of a potential bank for capital infusion, LVB will now be merged with DBS Bank India, a subsidiary of Singapore’s DBS. “This is a part of the clean up that was required in the banking sector,” said Javadekar. While some have praised the RBI’s decisiveness, others like the head of the All India Bank Employees’ Association (<a href="https://www.businessinsider.in/finance/banks/news/rbis-decision-to-merge-lvb-with-dbs-bank-questioned-by-banking-union-head-on-why-other-institutions-werent-considered/articleshow/79277116.cms">AIBEA</a>) and <a href="https://www.businessinsider.in/finance/banks/news/lakshmi-vilas-bank-promoter-believes-the-rbi-shouldve-called-for-bids-from-interested-parties-other-than-dbs-bank/articleshow/79320765.cms">one of the bank’s promoters</a> have raised the red flag on the central bank’s decision. The primary concern to these queries is why other bids were not considered for the merger of LVB. The former Chairman of Canara Bank and the man appointed by the RBI to lead the bank during the moratorium period, TN Manoharan, assured the press that <a href="https://www.businessinsider.in/finance/banks/news/lakshmi-vilas-bank-customers-have-withdrawn-10000-crore-since-rbis-moratorium-was-announced-last-night/articleshow/79281857.cms">there is no run on the bank</a> a day after taking over. Manoharan predicted that the lifting of withdrawal limits and the lifting of moratorium to be coterminal. If this holds true, <a href="https://www.businessinsider.in/finance/banks/news/lakshmi-vilas-bank-is-the-fifth-financial-firm-after-ilfs-dhfl-yes-bank-and-pmc-bank-to-collapse-in-india/slidelist/79286096.cms">RBI’s handling of the LVB crisis</a> will be considered at par with its swift handling during the Yes Bank scam. On the other hand, the PMC bank crisis remains unresolved — leaving its depositors in the lurch, even today. The street view Meanwhile, in the stock market, LVB’s share price continued to plummet for the seventh consecutive day on November 25. The stock has lost more than half of its value — around 55% — since the moratorium was announced on November 17. “In our view, the merger of LVB with DBS Bank, which is trying to expand its base in India, will be a long-term positive for the latter,” said Emkay Research in its report dated November 18. However, the analysts also point out that there is a flip side. Since LVB will now be delisted from the stock market, it will be a negative move for the minority investors in the company. SEE ALSO: <a href="https://www.businessinsider.in/finance/banks/news/bank-employees-to-go-on-a-nationwide-strike-tomorrow-in-solidarity-with-farmers-protests/articleshow/79402946.cms">Bank employees to go on a nationwide strike on November 26 in solidarity with farmers’ protests</a> <a href="https://www.businessinsider.in/tech/apps/news/twitters-verification-badges-are-set-to-make-a-return-here-all-the-terms-and-conditions-of-how-to-apply/articleshow/79402586.cms">Twitter's coveted blue ticks are making a comeback next year along with new account types and labels</a> <a href="https://www.businessinsider.in/science/space/news/elon-musk-led-space-x-is-ready-to-conduct-the-first-major-test-of-its-starship-rocket-next-week-and-set-a-new-record/articleshow/79401235.cms">Elon Musk-led Space X is ready to conduct the first major test of its Starship rocket next week and set a new record</a> <a href="https://www.businessinsider.in/tech/apps/news/15-of-the-43-apps-india-banned-today-are-dating-apps/articleshow/79389714.cms">One-third of the latest Chinese mobile apps banned by India are dating services</a>

LVB-DBS Bank India merger approved by Union Cabinet — ‘those who have made mistakes will be punished’

Beleaguered small private bank <keyword id="135860" type="COMPANY" weightage="20" keywordseo="Lakshmi-Vilas-Bank">Lakshmi Vilas Bank</keyword> (LVB) on Thursday said it has received an indicative non-binding offer from <keyword id="9565204" type="COMPANY" weightage="20" keywordseo="clix-group">Clix Group</keyword>. The bank had earlier said it was in talks for amalgamation with Clix Group, that comprises <keyword id="9409895" type="COMPANY" weightage="20" keywordseo="clix-capital-services">Clix Capital Services</keyword> Private Ltd, Clix Finance India Private Ltd and Clix Housing Finance Private Ltd. In a regulatory filing, the LVB said it has received an indicative non-binding offer from Clix Group but did not share any other details about the offer. In a regulatory filing on September 15, the company said that the mutual due diligence with Clix Capital is "substantially complete", and the parties are in discussions on the next steps. At the recent annual general meeting of the LVB, the shareholders had voted out seven directors, including the promoter and Managing Director and CEO, and the bank is now run by a three-member Committee of Directors. On Wednesday, the LVB said credit rating agency Brickwork Ratings India Pvt Ltd, has downgraded the rating from "BWR BB+" (Credit Watch with Developing Implications) to "BWR B+" (Credit Watch with Negative Implications) for its Unsecured Redeemable Non-Convertible Subordinated Lower Tier II Bonds-Series VII (Option B) of Rs 50.50 crore. Meanwhile, shareholder of the bank R. Subramanian has moved the Madras High Court to direct the Central government, the Reserve Bank of India and the Securities and Exchange Board of India to suspend the LVB's board and appoint an administrator. Subramanian contended that the mismanagement has resulted in gross non-performing assets (NPA) leaping from 2.67 per cent in 2017 to 15.30 per cent in 2019 and stretching to 25.39 per cent in March 2020. He said Religare Finvest Ltd had deposited Rs 400 crore on November 11, 2016 and Rs 350 crore on January 5, 2017 with the LVB, and the bank extended loans of approximately Rs 720 crore to ARHC Holdings and its subsidiary Ranchem against the said deposits without any documents of consent of the depositor company. He said the LVB neither obtained any documents nor consent from the depositor Religare Finvest to stand as surety. Subsequently, the LVB illegally adjusted deposit proceeds to loan accounts and the same was questioned by Religare Finvest which issued legal notice alleging the said appropriation of deposit proceeds to said loan accounts. The bank also violated SEBI regulations by not reporting this material development to the stock exchanges, he said. It has to be seen how Clix Group has looked at this issue while making its indicative non-binding offer to LVB. SEE ALSO: <a href="https://www.businessinsider.in/defense/news/indias-defence-ministry-removes-three-years-worth-of-monthly-reports-from-website/articleshow/78552916.cms">India’s Defence Ministry removes three-years worth of monthly reports from website</a> <a href="https://www.businessinsider.in/business/corporates/news/infosys-to-acquire-us-based-data-analytics-company-for-125-million-deal-expected-to-close-in-third-quarter/articleshow/78551010.cms">Infosys to acquire US-based data analytics company for $125 million — deal expected to close in third quarter</a> <a href="https://www.businessinsider.in/defense/news/iaf-displays-its-might-with-rafale-apache-tejas-and-others-during-the-annual-air-force-day-airshow/slidelist/78549506.cms">IN PICS: IAF displays its might with Rafale, Apache, Tejas, and others during the annual Air Force Day airshow</a> <a href="https://www.businessinsider.in/stock-market/news/tcs-and-wipro-lead-rally-in-it-stocks-after-tcs-ceo-announces-multi-year-technology-transformation-cycle-in-the-works/articleshow/78547893.cms">TCS and Wipro lead rally in IT stocks after TCS CEO announces multi-year 'technology transformation' cycle in the works</a>

Troubled Lakshmi Vilas Bank receives indicative non-binding offer from Clix Group

The Committee of Directors (CoD) at the troubled <keyword id="135860" type="COMPANY" weightage="20" keywordseo="Lakshmi-Vilas-Bank">Lakshmi Vilas Bank</keyword> (LVB) has shortlisted three candidates for the post of MD and CEO and the names will be sent to the RBI within a week, an official of the bank said. The lender's chief executive S Sundar and six other directors were voted out by shareholders earlier this week. Post the removal, the Reserve Bank appointed a three-member Committee of Directors (CoD) comprising independent directors Meeta Makhan, Shakti Sinha and Satish Kumar Kalra. "A bank cannot work without a managing director and chief executive officer (MD and CEO). So, we at the board got together and discussed how to move ahead without an MD (for the time being). "The bank had interview for the post... and we have selected three candidates. We will send our recommendations to the Reserve Bank within a week," Sinha told . All the three candidates are from the private sector, he added. He also emphasised that the CoD is running the bank in the capacity of an administrator and there is complete transparency in its functioning. In reply to a question on what could have triggered the shareholders to take such a drastic step, Sinha said apparently they lost confidence in those directors and thus voted them out. The South-based lender has been struggling to raise capital for the last few years. A proposal of merger with non-banking finance company Indiabulls Housing Finance was rejected by the RBI in 2019. Subsequently, LVB had in June 2020 inked a non-binding agreement with the Clix Group for amalgamation. Sinha said the CoD is much very inclined to go ahead the deal with Aion Capital-backed Clix Capital, which is an NBFC. "We want the bank to function normally and we are going ahead with the raising of capital, as planned. They (Clix) are committed to the process of going ahead. The bank remains the same, we hope to get it very soon," he added. For the full year 2019-20, LVB posted a net loss of Rs 836.04 crore, marginally lower from the loss of Rs 894.09 crore in 2018-19 Sinha also said the situation at LVB is akin to what Yes Bank went through earlier this year. "Our troubles are old troubles, these are not fresh troubles. We have big burden of the past. They thought the economy is doing well (in the past) and took a bit of risk. There were three-four bad deals of Rs 300-500 crore and that suddenly changed everything," Sinha said. Troubles at the bank started after it shifted its focus to large businesses from SMEs. It extended nearly Rs 720 crore to the investment arms of Malvinder Singh and Shivinder Singh, former promoters of pharma major Ranbaxy and Fortis Healthcare, against fixed deposits (FDs) of Rs 794 crore made with the bank in late 2016 and early 2017. Last week, the Delhi Police arrested two former employees of <keyword id="167206" type="COMPANY" weightage="20" keywordseo="lakshmi-vilas">Lakshmi Vilas</keyword> Bank for their alleged involvement in misappropriation of fixed deposit receipts worth Rs 729 crore of Religare Finvest Limited. As the bank was incurring losses for the previous 10 quarters, the Reserve Bank of India placed it under the Prompt Corrective Action (PCA) framework in September 2019. Under the PCA, the bank has been asked to bring in additional capital, restrict further lending to corporates, reduce NPA and improve its provision coverage ratio to 70 per cent. "There has been a steady decline in the bank's deposit base since September 2019 and increase in the NPA ratios. The bank's Tier 1 capital ratio has turned negative, at (-)0.88 per cent, as compared to the minimum requirement of 8.875 per cent," LVB's auditor has said in its annual report for FY20. However, the truncated board of LVB has sought to assuage investors, stating that the bank's liquidity situation was comfortable and assured the depositors that their monies were safe. "With Liquidity Coverage Ratio (LCR) of about 262 per cent as on September 27, against minimum 100 per cent required by RBI, the deposit-holders, bond-holders, account-holders and creditors are well safe guarded," the bank had said in a statement on Sunday. Stock of LVB closed 6.7 per cent lower at Rs 18.80 apiece on BSE on Wednesday. SEE ALSO: <a href="https://www.businessinsider.in/india/news/babri-masjid-demolition-case-cbi-special-court-acquits-all-accused-judge-says-demolition-was-not-pre-planned/articleshow/78401534.cms">Babri Masjid demolition case: CBI Special Court acquits all accused, judge says ‘demolition was not pre-planned’</a> <a href="https://www.businessinsider.in/india/news/rbi-records-its-largest-ever-current-account-surplus-but-thats-not-necessarily-a-good-thing/articleshow/78403696.cms">RBI records its largest-ever current account surplus — but that’s not necessarily a good thing</a> <a href="https://www.businessinsider.in/tech/enterprise/news/airtel-launches-new-cybersecurity-product-with-cisco-radware-vmware-and-forcepoint-for-enterprises-it-took-100-crore-and-over-a-year-to-set-up/articleshow/78403006.cms">Airtel launches new cybersecurity product with CISCO, Radware, VMware, and Forcepoint for enterprises — it took ₹100 crore and over a year to set up</a>

Lakshmi Vilas Bank shortlists three candidates for MD & CEO post — will send names to RBI in a week

New Delhi, Jun 10 () Lakshmi Vilas Bank (LVB) on Wednesday said it has appointed B K Manjunath as its non-executive and independent director. The bank's board of directors at its meeting on Wednesday co-opted B K Manjunath as additional director, LVB said in a regulatory filing. Manjunath has been classified as non-executive and independent director, it said. Manjunath is a member of the Institute of Chartered Accountants of India and practising as a chartered accountant. He has an experience of over 30 years in audit, accountancy, taxation, finance, business management and administration. He had also served as an independent director of the bank between 2008 and 2015, and as its part-time chairman during the June 2017-June 2020 period, LVB said. KPM HRS

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Banking union head demands that RBI nominees on LVB board should also be held liable

IANS

LVB-DBS Bank India merger approved by Union Cabinet — ‘those who have made mistakes will be punished’

Prabhjote Gill

Troubled Lakshmi Vilas Bank receives indicative non-binding offer from Clix Group

IANS

Lakshmi Vilas Bank shortlists three candidates for MD & CEO post — will send names to RBI in a week

PTI

Lakshmi Vilas Bank appoints B K Manjunath as non-exec, independent director

PTI

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