New Delhi: The Centre on Tuesday placed Lakshmi Vilas Bank under a moratorium for 30 days and restricted maximum withdrawal from the bank at Rs 25,000.
Its board has been superseded by members from government and have capped the withdrawal at Rs 25,000/- in a day.
The step was taken by the government, on the advice of the Reserve Bank, in view of the declining financial health of the private sector lender.
In a statement, the RBI said in the absence of a credible revival plan, there was no alternative but to apply to the central government for imposing a moratorium under Section 45 of the Banking Regulation Act, 1949.
T N Manoharan, former non-executive chairman of Canara Bank, has been appointed as the administrator of the bank.
The Central government also directed Lakshmi Vilas Bank to pay for repaying loans or advances granted against government securities or other securities to it by the RBI or the State Bank of India or by any other bank and remaining unpaid on the date on which this order comes into force.
