The Union Cabinet approved the merger of Lakshmi Vilas Bank with DBS Bank India Limited on Wednesday. Union Minister Prakash Javadekar commented on the approved Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL) after the Cabinet meeting, saying that the merger of these banks would safeguard deposits of 20,000 account holders.

He also said that the Cabinet has asked the Reserve Bank of India to fix the accountability of former directors of LVB for worsening the position of the bank. LVB has been under a moratorium for a period of 30 days since November 17, 2020. According to an official statement, this was done to protect the depositors’ interest, and in the interest of financial and banking stability, on RBI's application under section 45 of the Banking Regulation Act, 1949.

Also, RBI, in consultation with the Government, has superseded the Board of Directors of LVB and appointed an Administrator to protect the depositors' interest. Doing this will ensure that there will be no further restrictions on the depositors regarding the withdrawal of their deposits.