New Delhi,Nov 17,2020: Lakshmi Vilas Bank (LVB) has been placed under moratorium for a month, with depositors restricted from withdrawing more than Rs 25,000 from their accounts, as India’s financial authorities look to coordinate a rescue act for the struggling private sector bank.
Account holders will only be able to withdraw more than Rs 25,000 (up to Rs 5 lakh after getting special permission) for education needs or medical emergencies.
The Reserve Bank of India (RBI), in consultation with the Centre, has thus superseded the bank’s board of directors owing to “serious deterioration in the financial position of the bank”.
According to a RBI statement, N. Manoharan, former non-executive chairman of Canara Bank has been appointed as LVB’s administrator.
“The financial position of the Lakshmi Vilas Bank Ltd. (the bank) has undergone a steady decline with the bank incurring continuous losses over the last three years, eroding its net-worth. In absence of any viable strategic plan, declining advances and mounting non-performing assets (NPAs), the losses are expected to continue. The bank has not been able to raise adequate capital to address issues around its negative net-worth and continuing losses,” the central bank’s statement noted.
