Bank employees' union AIBEA has said that the RBI’s culpability in the failure of the 94-year-old Lakshmi Vilas Bank needs to be looked into and that the proposed merger of the lender with DBS Bank India Ltd (DBIL) will provide a back-door entry for a foreign banking entity into the Indian market.

In a letter to Finance Minister Nirmala Sitharaman on Wednesday, the All India Bank Employees Association (AIBEA) said the approach of amalgamation of the  Laxmi Vilas bank with Indian subsidiary of a Singapore-based bank is opposite to the policy of Aatmanirbhar Bharat professed by the government.

The 94-year-old Lakshmi Vilas Bank was profitable for 90 years and that the bank has been incurring losses for the past three years only, the association said. "And, it is well-known that these losses are attributable to some huge loans given to a few well-known delinquent borrowers. A thorough probe is needed as to why these loans were given knowing the negative credentials of these borrowers, why RBI did not advise the bank to exercise prudence in giving these loans, why RBI did not timely action on the erring top officials of that bank, etc," the letter said.

Lakshmi Vilas Bank's merger with DBIL will be effective from November 27 and the proposal was approved by the Union Cabinet on Wednesday.

Murugappa Group takes over majority stake in CG Power

Market sparkle over 1pc higher, Nifty back at 13,000; JSW Steel, Tata Steel top

Central government prohibits vaccination of animals