Corporate governance a key factor for DBS' takeover of LVB to work

THE Reserve Bank of India (RBI) made history last month by reaching out to a foreign lender for the first time to rescue a local bank. This unique acquisition by DBS Bank India Ltd (DBIL) of the struggling Lakshmi Vilas Bank (LVB) will no doubt present unique challenges, especially the potential corporate governance problems and risks that DBIL might inherit with the proposed merger.

It was revealed by RBI that LVB had experienced serious governance issues and practices which had resulted in the deterioration of its financial performance.

These issues highlight the importance of having strong corporate governance practices in place as it serves as the backbone of a company, ensuring that affairs are being conducted in a transparent and ethical manner to achieve long-term sustainable growth.