RBI To Fold Lakshmi Vilas Bank Into Arm Of Singapore's DBS
The Reserve Bank of India (RBI) on Tuesday proposed folding Lakshmi Vilas Bank into the local unit of Singapore's DBS, shortly after taking control of the Indian lender due to a "serious deterioration" in its financial position. (Also Read: Centre Caps Withdrawal From Lakshmi Vilas Bank At ₹ 25,000 Till December 16 )
RBI also said in a statement it had temporarily capped withdrawals from Lakshmi Vilas, which had been locked in protracted talks with Clix Capital, at Rs 25,000 ($336). Lakshmi Vilas has been looking for a buyer since last year and the RBI last year rejected a proposal for it to merge with shadow lender Indiabulls Housing Finance Ltd
Clix, part of a company owned by Mumbai-based private equity firm AION Capital, had in June submitted a non-binding offer to acquire Chennai-based Lakshmi Vilas, which has been struggling with bad loans and governance issues.AION is a partnership between New York-based Apollo Global Management and a unit of India's ICICI Bank.
Lakshmi Vilas shares fell 4 per cent last week after India's Economic Times reported Clix was prepared to walk away from the deal if talks dragged on without a firm timeline.
