Govt lifts moratorium on Laxmi Vilas Bank

November 25, 2020 15:40

Union Cabinet approves Scheme of Amalgamation of Lakshmi Vilas Bank with Development Bank India Ltd, a private bank. With this, there will no further restrictions on the depositors regarding the withdrawal of their deposits, says Union Minister Prakash Javadekar.

The government last week placed Lakshmi Vilas Bank under one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.

The step was taken by the government, on the advice of the Reserve Bank, in view of the declining financial health of the private sector lender.

In a statement, the RBI said in the absence of a credible revival plan, with a view to protect depositors' interest and in the interest of financial and banking stability, there was no alternative but to apply to the central government for imposing a moratorium under Section 45 of the Banking Regulation Act, 1949.

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