Friday, March 5, 2021
Sarbat Sehat 40 5

Markfed Sohna New

Verka Ice Cream

Innocent Hearts INNOKIDS Banner

DBS Bank was ready to pay Rs 100/share for LVB in 2018, RBI offers it free: LVB Promoter

- Advertisement -

Chennai, Nov 20, 2020-
Advocating a proper valuation of the Lakshmi Vilas Bank (LVB), one of its promoters said that Singapore-based DBS Bank was willing to acquire 50 per cent stake in the 94-year-old Karur-based lender in 2018 at over Rs 100 per share. He said the RBI should have called for bids from interested parties.

The Reserve Bank of India (RBI) is now offering the 563 branches (many branches, head office, corporate office-owned building) LVB and other real estate free of cost to DBS Bank India Ltd, a subsidiary of the DBS Bank, Singapore.

“In 2018, we had appointed JP Morgan for the LVB’s capital raising programme. At that point in time, all the financial ratios were positive for the bank. All the provisions made then were also known to the RBI and others,” K.R. Pradeep, one of the LVB promoters, told.

According to Pradeep, about 15 large investors showed interest to invest in the LVB.

“DBS Bank and JP Morgan met RBI officials. DBS Bank said it was willing to acquire 50 per cent stake in LVB and the investment will be about Rs 3,500 crore,” Pradeep said.

“However, the RBI said DBS has to dilute its stakes to 15 per cent in 10 years but the DBS Bank was not agreeable; the deal process did not progress further,” he added.

K. Ravindrakumar, a former Director and the grandson of K.P. Radhakrishna Chettiar, one of the founding members of the LVB, told: “Today every bank branch is valued at Rs 10 crore, applying which the value of the branch network of LVB will be Rs 5,630 crore.”

According to Ravindrakumar, other than the Rs 368 crore bond, there is no major liability for the LVB.

Pradeep said: “Logically, the RBI should have called for bids from interested parties. Or, if it wanted to give the LVB to only DBS Bank India, it could have asked it to talk with the former to give their valuation.”

“If loss-making units are to be palmed off for free, then Air India, power utilities, state transport corporations, and other public sector undertakings could also be given free to the interested parties,” he said.

Lakshmi Vilas Bank’s branch network alone can be valued at Rs 5,630 cr: Ex-Director

On Tuesday, the RBI announced its decision to amalgamate the LVB with the DBS Bank India.

As per the draft amalgamation scheme, the RBI has said that on and from the appointed date, the entire amount of the paid-up share capital and reserves and surplus, including the balances in share/securities premium account of the transferor bank (LVB), shall stand written off.

On and from the appointed date, the transferor bank shall cease to exist by operation of the scheme, and its shares or debentures listed in any stock exchange shall stand delisted without any further action from the transferor bank, transferee bank (DBS Bank India) or order from any authority.

According to Pradeep, the LVB owns its corporate office in Chennai, the head office in Karur, several branches and residential apartments in several cities, including Mumbai and land parcels.

“We have built strong rooms in over 100 branches. As a result, we can do gold loan business safely to the tune of Rs 20,000 crore. Many non-banking finance companies (NBFC) do not have proper strong rooms,” he added.

According to him, the immovable assets easily would be valued at about Rs 400 crore.

“The bank’s net worth is not in negative. Further, the written-off loans will be about Rs 600 crore and even if 25 per cent of that are recovered, it is a bumper bonus for the buyer,” Pradeep said.

“There is a strong case of valuing the bank in a proper manner. With its decision to give the LVB free of cost to the DBS Bank India, all private entities are at risk now,” he remarked. (Agency)

- Advertisement -

Yes Punjab - TOP STORIES

Punjab News

Sikh News

Transfers, Postings, Promotions

- Advertisement -Bibi Jagir Kaur Guru Gobind Singh Prakash Purab Banner

Stay Connected



Shreya Ghoshal announces pregnancy

Mumbai, March 4, 2021- Singer Shreya Ghoshal took to Instagram on Thursday to share the news of her pregnancy with fans. The singer posted a...

Sonu Sood to launch blood bank app

Mumbai, March 3, 2021- Actor Sonu Sood is going to launch what is expected to be India's biggest blood bank, through an app named Sonu...

Bigg Boss 14 - The Latest




Bill Gates

Target Net Zero by 2050 – By Asad Mirza

In his new book on climate change and its adverse impact in the future, Bill Gates urges everyone to remember two things: Net Zero...
Farmers Protest againt Farm Laws in Delhi

All India Kisan Agitation against 3 Farm Laws & the deadlock – by KS Chawla

Almost three months have passed since the 41 kisan unions of the country have launched agitation against the three farm laws passed by the...
amarinder jakhar

Congress captures Urban Bodies in Punjab leaving others far behind – by KS Chawla

The Congress Government led by Amarinder Singh has captured the Local Bodies in the elections to the eight Municipal Corporations and 109 Municipal Councils...


Health & Fitness

Edible Oil

Clinical studies find mustard oil may be best for your heart: Experts

New Delhi, March 4, 2021- If you want to achieve good health amid the pandemic, choosing the right oil should be the foremost step as Covid-19 is an inflammatory disease and we should, therefore, focus more on anti-inflammatory diets and the right cooking oil, top health experts have said. Eminent physician and cardiologist and Past President of the Indian Medical Association...

Gadgets & Tech

error: Content is protected !!