By P. Sarojini
MUMBAI, India (CWBN)_ Reserve Bank of India stated that the government had approved the act of amalgamation of Lakshmi Vilas Bank (LVB) with DBS Bank India Ltd, and following this, the customers and depositors of LVB will be shifted to DBS Bank and that the moratorium imposed by the government on LVB will be withdrawn on November 27.
The RBI further briefed on this new scheme saying that the LVB customers can now operate their accounts as customers of DBS Bank from November 27 onwards and that the existing LVB branches will operate as branches of DBS Bank. Moreover, the RBI assured that possible arrangements will be made by DBS Bank in order to provide uninterrupted services to the LVB customers.
Recently, a 30-day moratorium had been imposed on Lakshmi Vilas Bank by the government based on the advice of the RBI in order to control the private bank’s deteriorating financial health, which restricted cash withdrawals at INR 25,000 per depositor. Further, the RBI replaced the board by appointing former non-executive chairman of Canara Bank Mr. T N Manoharan as the administrator for LVB during the moratorium period.
Mr. Manoharan, during interviews to media, expressed confidence that he will sort out the availing issues well before the end of moratorium period on December 16 and will find effective solutions soon. He said that the idea of amalgamation of the LVB and DBS Bank will guarantee bringing INR 2,500 crore to the bank, which will be highly beneficial for the bank’s sustainability as well as to reach further levels.
In the meantime, the LVB customers were panicked by the imposed moratorium and began withdrawing their money from the bank, which resulted in depositors withdrawing around INR 10 crore in a day. Mr. Manoharan advised the branches of the bank to consider the situation as the demonetization moment for the bank as customers may panic and freak-out due to improper communications.
Edited by Elishya Perera
