Lawstreet Journal

Lakshmi Vilas Bank Placed Under Moratorium, Centre Announces Draft Amalgamation Scheme with DBS Bank India Ltd.

Lawstreet Journal 19 Nov 2020 9:04pm

Image courtesy: Lawstreet Journal Business Lakshmi Vilas Bank Placed Under Moratorium, Centre Announces Draft Amalgamation Scheme with DBS Bank India Ltd.

Private sector lender Lakshmi Vilas Bank on Tuesday, November 17, 2020, was brought under moratorium with immediate effect till December 16, 2020, thereby, staying all actions and proceedings against that banking company during this period.

During the month-long moratorium, the cash withdrawal limit has reportedly been capped for customers at Rs 25,000 in a month. 

The moratorium was imposed on the basis of an application submitted by the Reserve Bank of India (RBI) under Section 45 of the BR Act, according to a statement from the Ministry of Finance.

The statement said, "In exercise of the powers conferred by sub-section (2) of section 45 of the Banking Regulation Act, 1949 (10 of 1949), the Central government, after considering an application made by the Reserve Bank of India under subsection (1) of that section, hereby makes this Order of moratorium in respect of the Lakshmi Vilas Bank Limited, Karur, Tamil Nadu for the period with effect from 18:00 hrs on the 17th day of November 2020 up to and inclusive of 16th day of December 2020 and hereby stays the commencement or continuance of all actions and proceedings against that banking company during the period of moratorium, subject to the condition that such stay shall not in any manner prejudice the exercise by the Central government of its powers under clause (b) of sub-section (4) of section 35 of the said Act or the exercise by the Reserve Bank of India of its powers under section 38 of the said Act."

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Tagged: Reserve Bank of India  
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