Page 6 - Banking Finance December 2020

BANK UPDATE

Launched in 2016, it had crossed 1 bil- has enough liquidity to pay back the "To support the ongoing efforts aimed at
lion transactions for the first time in depositors," he said during a confer- global integration of Indian financial
October 2019. While it took UPI three ence call. markets, facilitate India's efforts to de-
years to reach a billion transactions in He added that all LVB employees will velop international financial centers, and
a month, the next billion came in just retain their jobs at the same remu- to provide wider payment flexibility to
a year. domestic corporates and institutions, it
neration after the merger. "Will try to
UPI has rebounded sharply from its fall ensure there is no shortage of cash at has been decided to make available the
RTGS system round-the-clock on all
in April, when it recorded 0.99 billion any bank branches," said Manoharan,
transactions as the pandemic-induced adding that there has been no run on days," said the Statement on Develop-
lockdown forced people to cut spend- deposits in the bank. mental and Regulatory Policies.
ing. Since then, transactions have According to the RBI scheme, on and In December last year, the National
more than doubled, despite the from the appointed date, the entire Electronic Funds Transfer (NEFT) sys-
economy witnessing a contraction in amount of the paid-up share capital tem was made available on a
the first quarter. 24x7x365 basis.
and reserves and surplus, including the
balances in the share or securities pre- Mahesh Ramamoorthy, Managing Di-
LVB has enough liquidity
mium account of the transferor bank, rector, Banking Solutions, Interna-
to pay back depositors: will stand written off. The promoters tional Market, APAC, FIS, said the move
Administrator hold 6.80 per cent of the equity capi- would enable India to become an in-
tegral part of the global financial mar-
The terms of the amalgamation of tal while the balance is held by retail kets and provide wider payment elas-
Lakshmi Vilas Bank (LVB) with DBS and big investors. ticity to domestic companies and insti-
Bank have upset stock investors, lead- "We believe a merger would be ben- tutions.
ing to a 20 per cent crash in LVB shares eficial for DBS Bank as it would be able "The RBI initiative will also enable al-
to Rs 12.40 on the BSE. The Adminis- to grow business in the south … In this most all businesses to operate 24X7,
trator appointed by the Reserve Bank merger, shareholder of LVB will not get with a payment system that supports
of India (RBI) for LVB, T N Manoharan, any benefit," said Jaikishan Parmar, trade and commerce," he said.
assured depositors that the bank has senior research analyst, Angel Broking.
enough liquidity to pay back their
money deposited in the bank. Airtel Payment Bank joins
RTGS payment available
The draft scheme of amalgamation 24x7 from Dec hands with Bharti AXA
has said the transferor bank (LVB) General
"shall cease to exist by operation of the The Reserve Bank of India, announced Airtel Payments Bank has partnered
scheme, and its shares or debentures that the Real-Time Gross Settlement with Bharti AXA General Insurance to
listed in any stock exchange shall stand (RTGS), which is used for large-value offer comprehensive car insurance to
delisted." This means LVB shares will be fund transfers, will be available round- the payments bank's customers.
written off as per the terms of the theclock from December .
scheme. The bank had a market At present, RTGS, which has a mini- The Smart Drive Private Car Insurance
capitalisation of nearly Rs 500 crore. mum fund transfer of Rs. 2 lakh, is offers financial protection against
damage to the vehicle due to acci-
Assuring that the depositors' money is available for customers from 7.00 am dent, theft, and natural and man-
safe, Manoharan expressed confidence to 6.00 pm on all working days of a made disasters. Airtel Payments Bank's
of completing its merger with DBS week (except the second and fourth customers can purchase the Bharti
Bank India within the 30-day deadline Saturdays). AXA car insurance policy within five
set by RBI. He added that LVB has Rs "With this, India will be one of the very minutes using a paperless, secure, and
20,000 crore in deposits and Rs 17,000 few countries globally with a 24x7x quick process through the Airtel Thanks
crore in advances. "The top priority of 365 large-value real-time payment sys- app. Airtel Payments Bank, the
the bank is to assure depositors that tem," said RBI Governor Shaktikanta country's first payments bank, has over
their money is safe and that the bank Das. 3 crore customers.

6 | 2020 | DECEMBER | BANKING FINANCE