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Calming the jitters at Lakshmi Vilas Bank: why a merger with a big lender can be a better deal
Calming the jitters at Lakshmi Vilas Bank: why a merger with a big lender can be a better deal

Banking

Calming the jitters at Lakshmi Vilas Bank: why a merger with a big lender can be a better deal

Lakshmi Vilas Bank, Shivarampet, Mysore. Image credit: Christopher J Fynn, Wikimedia

Synopsis

Digital NBFC Clix Finance is said to be in advanced stages to acquire a majority stake in the beleaguered bank. However, public confidence will be higher if a big government bank steps in to take the reins, as depositor money will be safer and doubts over the bank’s ability to carry on as a ‘going concern’ will be put to rest.

Recent developments at Lakshmi Vilas Bank (LVB) have reinforced the deep-rooted trust deficit in India’s financial system, with governance lapses and mismanagement coming to the fore once again. In a rare event in the country’s corporate history, seven directors, including the promoter and the CEO of the 94-year-old private-sector lender, were ousted at an annual general meeting, as shareholder activism went on full display. A spate of such
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