The Union Cabinet on Wednesday approved the amalgamation of Lakshmi Vilas Bank with DBS India.
The center had imposed a one-month moratorium on the Karur-based lender that temporarily capped withdrawals at ₹ 25,000. The Reserve Bank of India (RBI) proposed a draft scheme of amalgamation that entails the Indian unit of Singapore’s DBS Bank taking over the capital-starved bank.
The jobs of the 400 employees will be secured and the depositers will also be protected, said Union Minister Prakash Javadekar, during a press meet in New Delhi on Wednesday. “Twenty lakh depositers and Rs.20,000 crore deposits are secure,” he added.
RBI has been told to act against those who brought the bank to the brink of closure. Liability will be fixed and those who have made mistakes will be punished, he said.
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