The RBI-appointed administrator for Lakshmi Vilas Bank TN Manoharan said Wednesday that the bank has sufficient liquidity to pay depositors.
Confident of the timely merger of Lakshmi Vilas Bank with DBS India – RBI appointed administrator.
Manoharan says that Lakshmi Vilas Bank has ₹20,000 crore in deposits and ₹17,000 crore in advances.
The government imposed a 30-day moratorium on Lakshmi Vilas Bank on Tuesday, restricting cash withdrawals in ₹25,000 per depositor, and simultaneously announced a plan to merge the cash-strapped lender with DBS India.
The step was taken on the advice of the Reserve Bank in view of the deteriorating financial health of the private sector bank.
The Reserve Bank also replaced the board of directors of Lakshmi Vilas Bank (LVB) and appointed Manoharan, a former non-executive chairman of Canara Bank, as its manager for 30 days.
The RBI placed in the public domain a draft scheme for LVB’s merger with DBS Bank India Ltd (DBIL).
DBS Bank India, in a statement, said that the proposed merger will bring stability and better prospects to LVB’s depositors, customers and employees.
“To support the merger, DBS will inject ₹2,500 crore (SGD 463 million) in DBIL if the plan is approved. This will be financed entirely from existing DBS resources, “he said.
LVB is the second private sector bank after Yes Bank, which has encountered bad weather this year.
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