Administrator of Lakshmi Vilas Bank, appointed by the Reserve Bank of India (RBI), TN Manoharan said on Wednesday that the bank has enough liquidity to return the depositors’ money. He said that right now our top priority is to assure bank depositors that their money is completely safe. The RBI administrator has expressed confidence that the merger of Laxmi Vilas Bank with DBS India will be completed in due time.
Manoharan said that Lakshmi Vilas Bank has deposits of Rs 20,000 crore and advances of Rs 17,000 crore. By advance it means that the bank has given these funds in the form of a loan. Lakshmi Vilas Bank, which was struggling with the economic crisis, was put into the Moratorium on Tuesday. Along with this, many kinds of restrictions were imposed for the next 6 months. During this time, bank customers will not be able to withdraw more than 25 thousand rupees from the bank. The bank’s board was also dissolved by the RBI.
RBI made a master plan
To save Lakshmi Vilas Bank in a huge crisis, the Reserve Bank has prepared a master plan. Under this, Lakshmi Vilas Bank will be merged with DBS Bank. According to the RBI plan, Singapore government-backed DBS will invest Rs 2500 crore in Lakshmi Vilas Bank. Under this, DBS Bank will have access to its home, personal loan and small scale industry loan customers through 560 branches of Lakshmi Vilas Bank. On the other hand, depositors of Laxmi Vilas Bank will also benefit.
Earlier, RBI has stated that the financial position of Lakshmi Vilas Bank has been continuously deteriorating. Its net worth has ended due to losses in the last three years. Losses are expected to continue due to lack of any strategic plan, dwindling advances and rising non-performing assets.
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