Lakshmi Vilas Bank Depositors Can Withdraw Only Rs 25,000 Until December 16; Heres Why RBI Has Stepped In

On November 17, the central government placed the Tamil Nadu-based private sector lender Lakshmi Vilas Bank under a moratorium. The government capped withdrawals from Lakshmi Vilas Bank customers' accounts at Rs 25,000 a month, the Ministry of Finance said in a statement. However, depositors will be allowed to withdraw more than Rs 25,000 with permission from the Reserve Bank of India for purposes such as medical treatment, payment of higher education & marriage expenses, the ministry said. The decision was taken on the Reserve Bank of India's advice in view of the bank's deteriorating financial health. In a separate statement, the RBI said there was no credible revival plan but to apply to the central government for imposing a moratorium. Lakshmi Vikas Bank was reportedly in talks with Clix Capital for capital infusion and a possible merger. Troubles for the bank started in 2019 when the RBI rejected a proposal for its merger with shadow lender Indiabulls Housing Finance. Watch the video to know more.