Customers, including depositors of the Lakshmi Vilas Bank, will be able to operate their accounts as customers of DBS Bank with effect from 27 November.
The moratorium on Lakshmi Vilas Bank will be withdrawn on 27 November 2020 as the government today sanctioned the scheme for the amalgamation of the Lakshmi Vilas Bank with DBS Bank India Ltd. All the branches of the Lakshmi Vilas Bank will function as branches of DBS Bank India with effect from this date, RBI said. Customers, including depositors of the Lakshmi Vilas Bank, will be able to operate their accounts as customers of DBS Bank with effect from 27 November. The Reserve Bank further said that DBS Bank is making necessary arrangements to ensure that smooth service is provided to the customers of the Lakshmi Vilas Bank.
The government had earlier, on the advice of the RBI, imposed a 30-day moratorium on the crisis-ridden Lalskmi Vilas Bank, restricting cash withdrawal at Rs 25,000 per depositor. Further, the Reserve Bank had superseded the board of the bank and appointed T N Manoharan, former non-executive chairman of Canara Bank, as an administrator of the bank for 30 days.
While talking to the media, Manoharan had assured that he is confident to achieve a resolution well before the moratorium gets over on 16 December. He had added 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.
Meanwhile, the moratorium imposed on the Lakshmi Vilas Bank had freaked out the bank customers and they lined up to withdraw their hard-earned money from the bank. The depositors had withdrawn approximately Rs 10 crores in a day. Manoharan had 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.