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A Lakshmi Vilas Bank branch in Chennai  (ANI)
A Lakshmi Vilas Bank branch in Chennai (ANI)

Lakshmi Vilas Bank has enough liquidity to pay back depositors: RBI-appointed administrator

  • Confident of timely merger of Lakshmi Vilas Bank with DBS India, says T.N. Manoharan
  • Manoharan says Lakshmi Vilas Bank has 20,000 cr in deposits and 17,000 cr in advances

RBI-appointed administrator for Lakshmi Vilas Bank T.N. Manoharan on Wednesday said the bank has enough liquidity to pay back depositors.

Confident of timely merger of Lakshmi Vilas Bank with DBS India, he said while referring to the 16 December deadline of the moratorium imposed by government on Tuesday.

Manoharan says Lakshmi Vilas Bank has 20,000 crore in deposits and 17,000 crore in advances.

Talking to reporters, Manoharan said that his top priority is to assure depositors that their money is safe and that the bank has enough liquidity to pay back the depositors.

He said post-merger, all LVB employees will retain their jobs at same remuneration. "Will try to ensure there is no shortage of cash at any bank branches," said Manoharan while adding that there has been no run on deposits in the bank.

The government on Tuesday imposed a 30-day moratorium on Lakshmi Vilas Bank, restricting cash withdrawals at 25,000 per depositor, and simultaneously announced a scheme to merge the cash-strapped lender with DBS India.

The step was taken on the advice of the Reserve Bank in view of the private sector bank's deteriorating financial health.

The Reserve Bank also superseded the board of Lakshmi Vilas Bank (LVB) and appointed Manoharan, former non-executive chairman of Canara Bank, as its administrator for 30 days.

The RBI placed in the public domain a draft scheme of amalgamation of LVB with DBS Bank India Ltd (DBIL).

DBS Bank India, in a statement, said the proposed amalgamation will provide stability and better prospects to LVB's depositors, customers and employees.

"To support the amalgamation, DBS will inject 2,500 crore (SGD 463 million) into DBIL if the scheme is approved. This will be fully funded from DBS' existing resources," it said.

"DBS' capital infusion aimed at triggering credit growth at LVB," said Manoharan.

RBI will issue the final merger draft on November 20.

LVB is the second private sector bank after Yes Bank which has run into rough weather during this year.

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