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RBI excludes Lakshmi Vilas Bank from second schedule of RBI Act

RBI excludes Lakshmi Vilas Bank from second schedule of RBI Act_50.1

The Reserve Bank of India (RBI) has excluded Lakshmi Vilas Bank (LVB) from the Second Schedule of the RBI Act after it was merged with DBS Bank India Ltd (DBIL) last year. A bank mentioned in the Second Schedule of the Reserve Bank of India Act is known as ‘Scheduled Commercial Bank’.

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Why did this happen?

  • Last year in November, the government had approved the merger of crisis-ridden Lakshmi Vilas Bank with DBS Bank India. The RBI had also superseded the board of the LVB and appointed T N Manoharan, former non-executive chairman of Canara Bank, as the administrator of the bank for 30 days.
  • LVB is the second private sector bank after Yes Bank which has run into rough weather during this year.
  • In March, capital-starved Yes Bank was placed under a moratorium. The government rescued Yes Bank by asking the state-run State Bank of India to infuse Rs 7,250 crore and take a 45 per cent stake in the bank.

Important takeaways for all competitive exams:

  • Lakshmi Vilas Bank Headquarters: Chennai, Tamil Nadu.
  • Lakshmi Vilas Bank Founded: 1926.

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