The Reserve Bank of India approved the merger of DBS Bank Ltd.'s Indian business unit with its wholly owned local subsidiary.
DBS Bank's unit will merge with DBS Bank India, the central bank said in a statement on its website. It will be effective March 1.
The Singapore-based lender is the second overseas bank to follow the wholly owned subsidiary model in India after the State Bank of Mauritius. It allows foreign lenders to be treated as a local bank, removing certain restrictions that they face such as those on opening new branches.
The RBI issued the wholly owned subsidiary guidelines in 2013, and the DBS Bank received the permission in 2017. It can now start the wholly owned subsidiary in a full-fledged manner.
DBS Bank India reported fund-based credit exposure worth Rs 24,652 crore and non-fund-based exposure worth Rs 22,203 crore as of June 30, 2018, according to Basel III disclosures made on its website. The gross non-performing asset ratio for the bank stood at 3.76 percent, while the net NPA ratio was at 0.35 percent.
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