The depositors of Lakshmi Vilas Bank have withdrawn approximately Rs 10 crores since the last evening.
Lakshmi Vilas Bank’s depositors lined up in haste to withdraw their money immediately after the Reserve Bank of India announced a moratorium on the bank, pending its resurrection via a merger with another bank. The depositors have withdrawn approximately Rs 10 crores since the last evening, said T N Manoharan, Administrator of the Lakshmi Vilas Bank, while talking to the media. Manoharan has cautioned the branches to presume as if it is a demonetisation moment for the bank, since there could be friction and panic among customers due to the lack of proper communication.
He further said that the rush is likely to happen in all the locations and thus the bank branches should gear up at facilitating the customers and there should be a special counter facility for senior citizens, women, physically challenged customers, and so on. T N Manoharan underlined that the withdrawal limit for customers is Rs 25,000, and is Rs 5 lakh under emergency circumstances, which are medical, marriage, and education, apart from other residuary cases.
He noted that for withdrawing Rs 5 lakh under emergency circumstances, the bank branches will take basic information such as the reason, residential proof, etc and send it to the corporate office. Later, the corporate office can allow it with the approval of the regulator.
Further, Manoharan said that it was appropriate to put a moratorium, which is just for 30 days duration, and he is confident to achieve a resolution well before the moratorium gets over on 16 December. He also highlighted that the amalgamation with the DBS bank will right away bring Rs 2,500 crores to the bank, which is intended not only for the bank’s sustainability but also to take it to the next level.
Lakshmi Vilas Bank has a legacy of 94 years, with 4,100 staff across 563 branches in India. It also has deposits of over Rs 20,000 crore and advances of Rs 17,000 crore. The bank reported a net loss of 112 crores in Q1 FY21, while it was on a PCA framework for the last 15 months and was undergoing testing times.