Moratorium on LVB to be lifted on November 27

NEW DELHI: The moratorium imposed on Lakshmi Vilas Bank by the Reserve Bank of India (RBI) will cease to exist from November 27 as against December 16 notified earlier, the central bank said in an official statement on Wednesday. All branches of LVB will function as branches of DBS Bank India Ltd (DBIL).
Earlier in the day, the government approved the merger of LVB with DBS Bank and removed restrictions on withdrawal of deposits by the accountholders.
“The amalgamation will come into force on the appointed date, that is, November 27. All the branches of the Lakshmi Vilas Bank Ltd will function as branches of DBS Bank India Ltd. with effect from this date,” the central bank said.
Consequently, customers of the bank will be able to operate their accounts as customers of DBS Bank India Ltd with effect from November 27.
DBS Bank India Ltd is making necessary arrangements to ensure that service, as usual, is provided to the customers of the Lakshmi Vilas Bank Ltd, the RBI said.
On November 17, the government had — on the advice of the RBI — imposed a 30-day moratorium on the crisis-ridden LVB restricting cash withdrawal at Rs 25,000 per depositor.
The RBI simultaneously placed in public domain a draft scheme of amalgamation of LVB with DBIL, a banking company incorporated in India under Companies Act, 2013, and having its Registered Office at New Delhi.
The Reserve Bank had also superseded the board of the LVB and appointed T N Manoharan, former non-executive chairman of Canara Bank, as administrator of the bank for 30 days.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 state-run State Bank of India (SBI) to infuse Rs 7,250 crore and take 45 per cent stake in the bank.
(With agency inputs)

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