You are here: Home » Finance » News » Banks
Business Standard

DBS faces lawsuits in India after takeover of Lakshmi Vilas Bank

DBS's Lakshmi Vilas acquisition was the first time the Reserve Bank of India turned to a foreign lender to bail out a local bank

Topics
Lakshmi Vilas Bank | DBS | DBS Bank

Chanyaporn Chanjaroen | Bloomberg 

Lakshmi Vilas Bank, LVB

Group Holdings Ltd., Southeast Asia’s largest lender, said it’s facing lawsuits in India related to its recent takeover of a struggling local bank.

Holders of Ltd.’s equity shares and Tier-II bonds that were written off before the effective date of amalgamation took legal actions against DBS’s local unit in various high courts in India, the Singapore-based lender said in a reply to questions from Bloomberg News. The acquisition was completed on Nov. 27, said earlier this month.

has no incremental unprovided risks on these lawsuits,” it said. “Other legal liabilities in the normal course of business have also been suitably provided for.”

DBS’s Lakshmi Vilas acquisition was the first time the Reserve Bank of India turned to a foreign lender to bail out a local bank as India’s financial industry suffered a series of shocks since the outbreak of a shadow banking crisis in 2018.

While the suits named DBS’s India unit as a respondent, the primary respondents would be the Indian government and the RBI, who drafted and approved the amalgamation program, according to DBS. An RBI spokesman declined to comment on the matter.

DBS’s Chief Executive Officer Piyush Gupta expects Lakshmi Vilas to become profitable in 12 to 24 months as the Singapore bank sets aside amalgamation expenses and allowances for soured assets, he said at a Feb. 10 earnings media briefing.

The Business Times earlier reported the suits and DBS’s comments.

Dear Reader,


Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Sat, February 20 2021. 11:07 IST
RECOMMENDED FOR YOU
.