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The Union Cabinet took a slew of decisions on Wednesday. These include the merger of Lakshmi Vilas Bank with DBS Bank India Limited, infusion of ₹ 6,000 crore in National Investment and Infrastructure Fund (NIIF) Debt Platform, and a ₹ 2,480.92 crore Foreign Direct Investment in ATC Telecom Infrastructure.
Commenting on the approved Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL) after the Cabinet meeting, Union Minister Prakash Javadekar said that the merger of these banks would safeguard deposits of 20,000 account holders. He also said that the Cabinet asked the Reserve Bank of India to fix accountability on former directors of LVB for worsening the position of the bank.
LVB has been under moratorium for a period of 30 days from November 17, 2020. An official statement said that this was done to protect depositors’ interest and in the interest of financial and banking stability, on RBI's application under section 45 of the Banking Regulation Act, 1949. In parallel, RBI, in consultation with the Government, superseded the Board of Directors of LVB and appointed an Administrator to protect the depositors' interest.
“With this there will be no further restrictions on the depositors regarding withdrawal of their deposits,” the statement said.
Capital infusion in NIIF
In another decision, the Cabinet approved the proposal for equity infusion by the Centre of ₹ 6,000 crores in NIIF Debt Platform sponsored by National Investment and Infrastructure Fund (NIIF). This debt fund comprises Aseem Infrastructure Finance Ltd (AIFL) and NIIF Infrastructure Finance Ltd (NIIF-IFL).
Only ₹ 2,000 crore would be allocated during the current year 2020-2021. However, in view of the unprecedented financial situation and availability of limited fiscal space due to the prevailing COVID-19, the proposed amount may be disbursed only if there is readiness and demand for debt raising.
The NIIF will take all necessary steps to use the equity investments from domestic and global pension funds and sovereign wealth funds expeditiously, the statement said.
The Cabinet also approved a foreign direct investment of ₹ 2,480.92 crore in ATC Telecom Infrastructure by ATC Asia Pacific.
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