Rs 25,000 Withdrawal Limit Imposed on Laxmi Vilas Bank
The Ministry of Finance has placed Tamil Nadu-based private sector lender Lakshmi Vilas Bank (LVB) under a moratorium for a period of one month.
Tamil Nadu-based private sector lender Lakshmi Vilas Bank (LVB) has been struggling financially. They have incurred losses for the last 10 quarters. In 2019, the Reserve Bank of India (RBI) had rejected a proposal for its merger with shadow lender Indiabulls Housing Finance. In September 2020, LVB's shareholders ousted seven directors. The Reserve Bank of India (RBI) filed an application with the central government regarding LVB’s poor financial health. On the basis of this application, on 17th November, the Ministry of Finance placed LVB under a moratorium for a period of one month. Starting from 6 pm Tuesday 17th November until December 16, LVB accountholders will be allowed to withdraw only up to Rs. 25,000. However, there are certain exceptions. Customers will be allowed to withdraw more than Rs. 25,000 for medical treatment of the depositor or any person dependent on them, higher education and marriage expenses of the depositor or any person dependent on them, or an "unavoidable emergency."
However, the maximum a person can withdraw under these circumstances is Rs. 5 lakh. The government urged people to not panic, assuring them that their money will not be lost. The RBI also announced the amalgamation of LVB with DBS Bank India Ltd.
