





What Led to Lakshmi Vilas Bank's 2020 Merger with DBS?



Lakshmi Vilas Bank, a notable entity in India's banking industry, was founded in 1926 to address the financial needs of traders and farmers in Karur. Initiated by seven entrepreneurs, spearheaded by V.S.N. Ramalinga Chettiar, the bank began with a keen emphasis on commercial banking and eventually broadened its offerings to include wealth management services. Registered under the Indian Companies Act, operations were swiftly initiated. A milestone was achieved in 1958 when the Reserve Bank of India (RBI) granted it the status of a 'scheduled commercial bank', which propelled the bank's expansion and led to the acquisition of nine other banks, thereby broadening its national reach. Nevertheless, Lakshmi Vilas Bank encountered financial troubles that jeopardized its stability. The situation became critical in 2020 prompting RBI to enforce a moratorium to safeguard depositors by limiting withdrawals. The resolution came with an RBI-facilitated merger with DBS Bank India Ltd., finalized on November 27, 2020. This amalgamation incorporated the bank’s branches into the DBS network, bolstering its operational strength. This strategic unification maintained Lakshmi Vilas Bank's legacy while enhancing service capability through DBS’s strong backing, widening its reach and stability. This transformation highlights India's banking sector's adaptability and the vital role of regulatory measures in sustaining robustness. The merger affirms a continual commitment to serving customers and stakeholders, fueled by the banking industry's ongoing evolution.



