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Lakshmi Vilas Bank: RBI ready to meet deposit shortfall at Lakshmi Vilas Bank, says executive – Times of India

CHENNAI: The RBI-appointed administrator of Lakshmi Vilas Bank (LVB) has said he has the central bank’s assurance to meet any shortfall in paying back depositors and there was no need to panic. The statement came a day after LVB was placed under a 30-day moratorium and cash withdrawals were capped at Rs 25,000 per customer for a month.
LVB administrator T N Manoharan said, “We have not sought any liquidity from the regulator so far. We are confident of meeting the requirement of depositors’ withdrawals by the bank itself. And wherever required, we have the backing of the regulator to ensure that there is no deficit or shortfall on this account.”

Currently, under special powers vested with the RBI, depositors can withdraw up to Rs 5 lakh for emergency purposes, with proof. Manoharan also said the bank has been monitoring the availability of currency in its chests to avoid any shortage of liquidity in any of its branches.
The top priorities were to ensure the scheme of amalgamation is progressively taken and completed smoothly and allow the depositors to withdraw the permissible amount till the end of moratorium period. “LVB does not face any liquidity issue for now. Deposits saw a marginal decline from Rs 20,973 crore as on September 30, to Rs 20,115 crore now. Advances grew marginally from Rs 16,620 crore to Rs 17,000 crore in the same period, largely driven by gold and jewellery loans,” he added.
Commenting on deposit rates, Manoharan said, “Decisions on interest rates and products will be addressed after the merger completes. No commitments can be made now.” He said all employees of LVB will continue to be in service after the amalgamation and deemed to be appointed by DBS Bank India (DBIL). Their remuneration and terms and conditions of the service will remain unchanged.

Some shareholders have opposed the move, protesting the delisting of the shares after the amalgamation process and that the value of the shares would be nullified. “One needs to wait and watch as the November 20 deadline to hear feedback is still days away.”

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