NEW DELHI
Private sector lender Lakshmi Vilas Bank on Tuesday 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 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.
Last month, credit rating agency CARE Ratings downgraded the 93-year old private sector bank's already issued and proposed securities. In a regulatory filing, the bank had stated that CARE has downgraded its ratings of the Rs 50.50 crore unsecured redeemable non-convertible subordinated lower tier-II bonds to CARE BB Minus with Negative Outlook.
Meanwhile, the Reserve Bank of India (RBI) has assured the depositors of the bank that their interest will be fully protected and there is no need to panic.
Last month, Laksmi Vilas Bank's founder K R Pradeep had told a news agency that there was no liquidity problem in LVB. He said they had 260 per cent liquidity coverage ratio versus an 80 per cent requirement.
