The 30-day moratorium on Lakshmi Vilas Bank is similar to YES Bank, protecting depositors and employees, but retail shareholders would be worst hit if amalgamation with DBS Bank India goes through.
The RBI has acted swiftly to tackle the Lakshmi Vilas Bank crisis by proposing a merger with DBS Bank India. But a thorough review of banking supervision may be necessary.
Thursday was an eventful day for the crisis-hit lender owing to merger-related speculations, but it ended with crippling the private bank’s most unsuspecting stakeholders—its depositors.
