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The Bombay High Court on Thursday refused to grant an interim stay to the merger of Lakshmi Vilas Bank with DBS Bank India.
A division bench of Justices Nitin Jamdar and Milind Jadhav heard the petition filed by a group of promoters of LVB and shareholder Indiabulls Housing Finance Ltd challenging the amalgamation of the bank with DBS Bank India.
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Like DBS, this may push other foreign lenders, too, to adopt the wholly-owned subsidiary model to expand their India footprintIt has adjourned the hearing to December 14.
The respondents to the petition include the Reserve Bank of India, LVB and DBS Bank India.
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Nod also given for infusing ₹ 6,000 crore in NIIF and ₹ 2,481 cr FDI in ATC Telecom Infrastructure“We are refusing the interim relief sought by the petitioners to stay the amalgamation. The petitions shall be placed for hearing on December 14 when the respondents shall file their affidavits in reply," the court said.
The Bombay High Court was hearing the petition just a day before the final scheme of amalgamation of LVB and DBS Bank India becomes effective. All the branches of the Lakshmi Vilas Bank Ltd. will function as branches of DBS Bank India.
The Union Cabinet approved the scheme of amalgamation on November 25.
Under the scheme, the entire amount of the paid-up share capital and reserves and surplus, including the balances in the share and securities premium account of the transferor bank, shall stand written off.
Senior advocate Ravi Kadam appeared for the RBI highlighted the importance of continuity of the financial system, depositor interest and economy. He also said shareholders are risk-takers.
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