Lakshmi Vilas Bank has enough liquidity to pay its depositors: RBI-appointed administrator TN Manoharan

Lakshmi Vilas Bank has enough liquidity to pay its depositors: RBI-appointed administrator TN Manoharan

Lakshmi Vilas Bank.( source:Ianstwitter)

New Delhi [India], November 18 (ANI): Trying to allay fears of Lakshmi Vilas Bank's (LVB) customers, Reserve Bank of India (RBI) appointed administrator for Lakshmi Vilas Bank (LVB) TN Manoharan on Wednesday said he was confident about the timely merger of the bank with DBS Bank of India (DBIL) and assured depositors that their money was in safe hands. "I am confident about the timely merger of Lakshmi Vilas Bank with DBS India following the 30-day moratorium imposed by the RBI for smooth amalgamation of the same," Manoharan said. The LVB currently has Rs 20,950 crore in deposits and Rs 17,325 crore in advances. The RBI on Tuesday unveiled a draft scheme to amalgamate private sector lender LVB with DBIL. The decision followed soon after the RBI imposed one-month moratorium on the private lender and capped deposit withdrawals at Rs 25,000. The step was taken on the advice of the RBI in view of the private sector bank's deteriorating financial health. The proposed amalgamation, according to Manoharan, will provide stability and better prospects to LVB's depositors, customers and employees following a time of uncertainty. The RBI has placed a draft scheme of amalgamation of LVB with DBIL in the public domain. "I request the customers, depositors, stakeholders and the general public to send their suggestions, concerns and complains regarding the draft rill 5 pm on November 20. Everything would be considered before forming the final draft for the amalgamation," Manoharan said. The proposed scheme of amalgamation is under the special powers of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949. Elaborating on the bank's deteriorating financial health, he said: "In the last two years, the focus of the bank shifted from retail to corporate lending. Some of the corporate lendings slipped, which led to asset deterioration. DBIL has a regulatory capital of Rs 7,190 crore and it will inject Rs 2,500 crore into LVB after the merger. This will be fully funded from DBS' existing resources with an aim to restore the financial health of the bank." Pertaining to the withdrawal limit of Rs 25,000 set for the customers following the imposition of the moratorium, LVB administrator assured that withdrawal limit can be exceeded to Rs 5 lakh in case of specific emergencies. "There is no run on the bank, customers are well patronising and understanding. The withdrawal limit had to be set as a part of the moratorium. But, in specific cases of emergency, which includes higher education, marriages and medical emergency, withdrawal up to Rs 5 lakh will be permitted. The bank has enough liquidity to pay its depositors. Not a single penny of the customer is at risk," Manoharan asserted. He also assured the employees of LVB that their job security stood standstill and the merger would have no impact on the terms and conditions of their ongoing service. "The employees of the LVB will continue to be in service. They shall be deemed to be appointed by the transferring bank, the remuneration will be the same and the terms and conditions of their service will remain untouched. All the obligation and liabilities will be taken over by DBIL," Manoharan confirmed. DBS will await a final decision on the proposed scheme from RBI and the Centre will announce further details at a later stage. DBS has been in India since 1994. In March 2019, to expand the franchise and build greater scale, DBS converted its India operations to a wholly-owned subsidiary, DBIL. DBIL is present in 24 cities across 13 states as of now. LVB has a 94-year old history in India, with established retail and small and medium entreprises customer base and a strong presence in south India. The LVB has been placed under an order of moratorium on November 17, 2020, which will be effective up to December 16, 2020, under section 45 of the Banking Regulation Act, 1949.

About Us

The argument in favor of using filler text goes something like this: If you use arey real content in the Consulting Process anytime you reachtent.