The High Court on Thursday refused to grant interim stay to the merger of 94-year-old Lakshmi Vilas Bank with DBS Bank. The merger decision is set to take effect on Friday.
Some shareholders of Lakshmi Vilas Bank, including India Bulls Housing Finance, have challenged the merger decision in the High Court. A bench of justices Nitin Jamdar and Milind Jadhav heard their plea on Thursday. The petitioners claimed that this was a shocking incident for the bank’s shareholders and investors at the time and that the RBI’s decision was unjust. Indiabulls is a shareholder of Lakshmi Vilas Bank and will face a loss of Rs 188 crore due to the merger decision. Dinyar Madan told the court. On behalf of the Reserve Bank, Adv. Ravi Kadam opposed the petition. As well as
He claimed that the decision to merge was taken in the wider public interest and in the interest of the depositors and employees of Lakshmivilas Bank. Kadam also told the court that the RBI had to take this decision due to the dire situation of the bank, which has 20 lakh accounts. On the other hand, since the situation of Lakshmi Vilas Bank has become very bad since March 2019, the RBI had to take this decision to improve it, argued Adv. Performed by Janak Dwarkadas.
After hearing both sides briefly, the court refused to grant interim stay to the decision to merge the petitioners. However, the question of financial rights has been raised in the petition. Therefore, a detailed hearing on the petition is required and a final decision is required, the court said. It also adjourned the hearing till December 14 and directed Lakshmivilas Bank, Reserve Bank and DBS Bank to file reply to the petition.
According to the RBI’s proposed merger, Singapore-based DBS’s Indian subsidiary DBS Bank India and Lakshmi Vilas Bank will be merged. As per the draft scheme, the full paid up share capital of the bank will be delisted and the capital market registration of shares of Laxmivilas Bank will also be removed. This merger has also been opposed by the Swadeshi Jagran Manch of the Sangh Parivar.
First Published on November 27, 2020 12:13 am
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