Union opposes merger of LVB with DBS Bank

Pitches for amalgamation with public sector bank

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‘Ploy to provide entry of foreign banks’

– All India Bank Officers’ Confederation president Sunil Kumar said the proposed amalgamation of the cash-strapped LVB with DBS Bank India seems to be a ploy to provide entry of foreign banks into the country in a big way

– The Indian banking sector provides huge opportunity for growth, so the foreign banks have been looking at inorganic route to expand their presence for long, he said

– He expressed apprehension that the unbridled entry of foreign banks “would lead the country into economic slavery and they will plunder the resources”

New Delhi, November 18

A day after the RBI put in public domain a draft scheme of merger of Lakshmi Vilas Bank (LVB) with subsidiary of Singapore-based DBS, public sector banks’ officer union AIBOC on Wednesday said the amalgamation is not in the national interest and demanded the consolidation with any PSB.

The proposed amalgamation of the cash-strapped LVB with DBS Bank India seems to be a ploy to provide entry of foreign banks into the country in a big way, All India Bank Officers’ Confederation (AIBOC) president Sunil Kumar said.

The Indian banking sector provides huge opportunity for growth, so the foreign banks have been looking at inorganic route to expand their presence for long, he said.

Kumar expressed apprehension that the unbridled entry of foreign banks “would lead the country into economic slavery and they will plunder the resources”.

He added that as a stakeholder, the AIBOC requests the RBI to re-think its stand on the proposed amalgamation in the national interest.

According to the draft scheme of amalgamation floated by the RBI on Tuesday, it proposed to merge the beleaguered private sector lender LVB with DBS Bank India Ltd (DBIL), the local unit of Singapore-based DBS Holdings.

“DBIL has a healthy balance sheet, with strong capital support. Although the DBIL is well capitalised, it will bring in an additional capital of Rs 2,500 crore upfront, to support credit growth of the merged entity,” the RBI had said.

Old-generation private sector banks have been serving the nation before independence and they have been almost working as PSBs in this country, Kumar said.

He added that thus, it should be merged with any public sector bank (PSB) to retain their character rather than a subsidiary of foreign bank.

In the past also, any old-generation private banks were merged with a PSB when they came under financial stress, he said.

“PSBs are not just doing commercial banking but social banking with nation first as their moto. It has been proved time and again and most recently, during the Covid period,” he said.

Kumar added that comparing the PSBs with the private sector banks would be unfair, as lenders in the private sector space only do banking with profitability as their sole objective.

It was the public sector bankers who extended the financial assistance from the government into the accounts of poor at the far-flung areas, naxal-affected villages and inhospital places, he said. — PTI