CPI objects to LVB merger with DBS Bank, asks what's the tearing hurry

Party General Secy D Rajan wants the ailing lender to be merged with a PSU bank instead, says this has been done in many cases in the past

Communist Party of India (CPI) General Secretary D Raja today voiced his opinion against proposed Lakshmi Vilas Bank (LVB) merger with DBS Bank India.

“Why (there is) such a hurry is not clear to anyone. The government should thoroughly enquire into the matter and stop the handing over of LVB to DBS Bank,” Raja asserted.

Lakshmi Vilas Bank, the 94-year-old Tamil Nadu-based private lender, has been making losses for the past few years due to mismanagement and bad loans given to known defaulters such as Jet Airways, Religare, Cox and Kings, Coffee Day, Nirav Modi and Reliance Housing Finance. Instead of taking action on the erring top officials, the Reserve Bank has announced that the bank will be handed over to DBS Bank of Singapore, Raja said.

He added that in the larger interest of the bank's depositors and customers, as well as its retail investors, it is desirable to merge LVB with a public sector bank as has been done in many cases in the past. 

"Handing over the bank to foreign bank smacks of the governments agenda to appease foreign investors. Further, within an hour of declaring the LVB moratorium, RBI has come out with the proposal to merge the lender with DBS Bank, which clearly indicates that the matter was already decided by the RBI," said Raja.