new Delhi. The Reserve Bank of India (RBI) has taken major action on Lakshmi Vilas Bank and placed the bank in the Moratorium. Customers of the bank will be able to withdraw cash of only 25 thousand rupees till December 16.
The RBI said in a statement issued on Tuesday that it took this decision because it did not have a reliable revival plan. According to RBI, this decision has been taken in view of protecting the interests of depositors, financial and banking stability. The Reserve Bank stated that Lakshmi Vilas Bank Limited has been kept in the Moratorium for 30 days. By December 16, the limit for withdrawal of money from the bank has been fixed at Rs 25 thousand.
Bank’s financial condition declines
The Reserve Bank said that there was a sharp decline in the financial position of Lakshmi Vilas Bank. The bank has consistently suffered losses in the last three years, reducing its net worth. Further losses are expected to continue due to lack of any strategic plan, decline in advance and rising NPAs. RBI also emphasized that serious governance cases have come to light in Lakshmi Vilas Bank. Not only this, in recent years her works have reduced her performance. It may be noted that the bank was placed in the Prompt Corrective Action (PCA) framework in September 2019.
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