Commotion at Lakshmi Vilas Bank branches as customers throng to withdraw money

By: |
November 19, 2020 7:00 AM

Many of the depositors could not withdraw money due to technical glitches and were told that the software was still to be re-calibrated to meet the curtailed withdrawal norms.

Lakshmi vilas bank, clix groupOn NSE, it plummeted 4.79 per cent to Rs 6.95 -- its lowest permissible trading limit for the day. Since last Tuesday (November 17), the stock has tanked 55.59 per cent on the BSE.

Commotion was witnessed at various branches of Lakshmi Vilas Bank (LVB) across the state on Wednesday as depositors flocked in large numbers to withdraw money in the wake of the bank being put under moratorium. Adding to the woes of customers, ATMs were inactive throughout the day.

Many of the depositors could not withdraw money due to technical glitches and were told that the software was still to be re-calibrated to meet the curtailed withdrawal norms. LVB was brought under moratorium late Tuesday evening, capping the withdrawal per borrower at Rs 25,000 till December 16.

Senior citizens and women were the bulk of customers who visited branches hearing the moratorium news. Visibly upset customers were seen questioning the staff over their inability to provide cash withdrawals. Customers complained that at many branches, staff were not able to give them satisfying explanations regarding the number of withdrawals within the cap of Rs 25,000.

Rethnavel Pandian, a senior citizen, said he had deposited a big amount since the bank offered higher returns compared to other private sector lenders. Among the crowd there were depositors seeking to withdraw money either for land registration or for emergency needs. Meenakshi Ammal said she promised to give Rs 40,000 to her son on Thursday for land registration, but now was unable to withdraw even Rs 25,000.

Pacifying agitated customers, a bank staffer said nothing has changed except for the withdrawal restrictions, and urged senior citizens to remain calm. He said the hurdles are temporary. LVB’s administrator TN Manoharan said at a press conference call that there was no need to panic, and every single rupee of the customers was safe.

“There is no cash crunch. ATMs will be operational from tomorrow. “Gradually, the system is getting re-calibrated factoring in the cap, so that customers are able to withdraw their money. The system is expected to be operational by tomorrow,” said Manoharan.

The priority is to help customers withdraw within the permissible limits of Rs 25,000 per month. The RBI has said withdrawals can be allowed up to Rs 5 lakh in emergency situations. “The books are closed and withdrawals are frozen when a moratorium is put in place. The regulator then permitted a Rs 25,000 withdrawal limit. “But the system can’t be released or opened up again like normal as the software is getting updated to address that,” he said. To address any shortage of cash at a particular branch, the manager has the option to either pull in funds from other branches or call the currency chest.

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