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This article is more than 1 year old.

LVB crisis: Administrator says confident of resolution to revive bank before moratorium period ends

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The RBI appointed Administrator of Lakshmi Vilas Bank TN Manoharan on Wednesday said he was confident of a resolution to revive the lender before the moratorium period of 30 days ends.

LVB crisis: Administrator says confident of resolution to revive bank before moratorium period ends
The Reserve Bank of India (RBI) appointed Administrator of Lakshmi Vilas Bank (LVB), TN Manoharan on Wednesday said he was confident of a resolution to revive the lender before the moratorium period of 30 days ends.
Speaking to reporters, Manoharan said his top priority was to complete the scheme of amalgamation smoothly. Overall administration of the bank will be carried out until amalgamation is taken to its natural conclusion, he added.
Yesterday, the union finance ministry brought LVB under moratorium until December 16 and capped the withdrawals by account holders and creditors at Rs 25,000 during the moratorium period.
The apex bank announced a draft scheme of amalgamation of LVB with DBS Bank India Ltd (DBIL). "The moratorium has been imposed on Lakshmi Vilas Bank to protect depositors and for financial stability," Manoharan said.
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Speaking on the merger, Manoharan said DBIL will bring Rs 2,500 crore upfront as part of the scheme of amalgamation. DBIL already has regulatory capital of Rs 7,109 crore.
The capital adequacy of the merged entity would be 12.51 percent even without the infusion of Rs 2,500 crore, he added.
"We are monitoring cash availability closely and coordinating with the regulator to ensure there is no shortage even if depositors line up to withdraw deposits," he said.
“To protect the interest of the depositors, for their emergency requirements, permission has been given to allow the depositors to withdraw Rs 25,000 and for certain exceptions and emergency grounds even up to Rs 5 lakh or to the extent they have the balance. This facility of withdrawal is being restored in a phased manner," Manoharan said urging depositors and not to panic.
“For employees across the 563 branches throughout the country, there is nothing to be concerned about as the scheme of amalgamation is such that the employee's interest is also taken care of. All the employees of LVB shall continue in service and be deemed to have been appointed in the transferee bank at the same remuneration and on the same terms and conditions of service," he told reporters.
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