Following the Centre’s placement of Lakshmi Vilas Bank (LVB) under a moratorium for 30 days and the withdrawal limit capped at Rs 25,000 till December 16, the bank account holders are complaining of inconvenience. “Being a current account holder, the withdrawal limit of Rs 25,000 is very less as the day to day transactions will get affected. Due date of GST payment in 20th of every month and I have to make those payments through my current account. How will I do that?” Sunil, a bank holder at Lakshmi Vilas Bank, Bengaluru, told ANI.
“They should allow a few things at least. Some payments are mandatory even by the government but I don’t know how will I do them now,” he added. People in Tamil Nadu’s Madurai also complained about the withdrawal limit, especially during the pandemic. “We were shocked. Withdrawal of Rs 25,000 is inadequate during this time (COVID-19 pandemic) when people are in need of money,” another bank holder said.
The Reserve Bank of India (RBI) on Tuesday unveiled a draft scheme to amalgamate private sector lender LVB with DBS Bank India Ltd (DBIL). The decision followed soon after the RBI imposed a one-month moratorium on the private lender and capped deposit withdrawals at Rs 25,000. The proposed scheme of amalgamation is under the special powers of the Government of India and RBI under Section 45 of the Banking Regulation Act, 1949.
According to RBI, the proposed amalgamation will provide stability and better prospects to Lakshmi Vilas Bank’s depositors, customers and employees following a time of uncertainty. “At the same time, the proposed amalgamation will allow DBIL to scale its customer base and network, particularly in South India, which has longstanding and close business ties with Singapore,” it said.
To support the amalgamation, DBS will inject Rs 2,500 crore (SGD 463 million) into DBIL if the scheme is approved. This will be fully funded from DBS’ existing resources. (ANI)