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 The central bank also superseded the board of directors of LVB for a period of 30 days owing to a serious deterioration in the financial position of the bank.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:
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