RBI approved the merger without giving time for share and bondholders to respond
Terming the merger of Lakshmi Vilas Bank (LVB) with Singapore based bank DBS (Development Bank of Singapore Limited) as most scandalous, 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.
“LVB is about 20 times larger than DBS in all dimensions of banking. LVB branches around India are about 550 in number. 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. In consideration for the above transfer of assets, DBS was to take over only the deposits of LVB. Further, the draft scheme envisaged that the entire bond and shares of LVB would be written off, incredible as may it sound and a scandal in itself,” said Swamy pointing out that in 72 hours, RBI approved the merger without giving time for share and bondholders to respond.
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.
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. “What is amazing is to note that RBI had sought objections from stakeholders which were to be filled on by the close of business hours on November 20, effectively giving less than 72 hours to the stakeholders to respond,” said Swamy. 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. Tamil Nadu headquarters of Lakshmi Vilas Bank was facing a huge NPA crisis due to doubtful loans and was in the eye of many powerful groups. Indiabulls was considered as the potential takeover applicant and the move collapsed after Swamy’s complaint and now Indiabulls facing an ED probe and its CEO Sameer Gehlaut is in London now.
Swamy also accused that RBI Governor Shakti Kanta Das from Tamil Nadu IAS cadre and trusted officer of former Finance Minister P Chidambaram is having a corrupt past. “The healthy functioning of RBI must remain one of the high priorities of our Government. And hence the present RBI Governor be sent out on indefinite leave till the investigations are over. The RBI Board and Advisory Committees be re-constituted,” said Swamy.
Subramanian Swamy’s letter to Prime Minister on the illegalities in the merger of Lakshmi Vilas Bank and DBS is published below:
Subramanian Swamy’s Letter to PM on LVB-DBS Merger by PGurus on Scribd
 Indiabulls boss in UK, says can’t join ED probe due to flight bar – Mar 19, 2020, ToI