Home   »   RBI puts Lakshmi Vilas Bank under...

RBI puts Lakshmi Vilas Bank under moratorium

RBI puts Lakshmi Vilas Bank under moratorium_4.1

The Reserve Bank of India (RBI) has placed cash-strapped Lakshmi Vilas Bank (LVB) under a moratorium for a period of one month and restricted withdrawals at Rs 25,000 for depositors, owing to a serious deterioration in the lender’s financial position. The central bank also superseded the board of directors of LVB for a period of 30 days owing to a serious deterioration in the financial position of the bank. The move was announced through an order by the Ministry of Finance.

Reserve Bank has come to the conclusion that in the absence of a credible revival plan, with a view to protecting depositors’ interest and in the interest of financial and banking stability, there is no alternative but to apply to the Central Government for imposing a moratorium under section 45 of the Banking Regulation Act, 1949.

Lakshmi Vilas Bank to be merged with DBS:

  • The RBI has also drafted a scheme of amalgamation for LVB with DBS Bank India Ltd. and aims to complete the merger process before the moratorium period ends.
  • DBS Bank India Ltd (DBIL) is a wholly-owned subsidiary of DBS Bank Ltd, Singapore (“DBS”), which in turn is a subsidiary of Asia’s leading financial services group, DBS Group Holdings Limited.
  • The bank invited suggestions and objections, if any, from members, depositors and other creditors of transferor bank (LVB) and transferee bank (DBIL), on the draft scheme.
  • DBIL will bring in additional capital of 2,500 crore upfront, to support credit growth of the merged entity.

Important takeaways for all competitive exams:

  • Lakshmi Vilas Bank Headquarters: Chennai, Tamil Nadu.
  • Lakshmi Vilas Bank Founded: 1926.
  • Lakshmi Vilas Bank President: Avtar Singh Monga.

Find More Banking News Here

RBI puts Lakshmi Vilas Bank under moratorium_5.1

Leave a comment

Your email address will not be published. Required fields are marked *