Laxmi Vilas Bank has been placed on moratorium for a month, beginning 17.11.2020 until 16.12.2020 stays the commencement or continuance of all actions and proceedings against that banking company during the period of moratorium, subject to the condition that such stay shall not in any manner prejudice the exercise by the Central Government of its powers under Section 35(b)(4) of the Banking Regulation Act,1949.
This means that the Bank shall not, without the permission in writing of the Reserve Bank of India, make, in the aggregate, payment to a depositor of a sum exceeding Rs.25,000/- from any of his savings, current or any other deposit accounts. The bank can further not make payments to any creditor exceeding Rs.25,000/- if not otherwise provided by the RBI in its order.
The Bank can however still make payments towards any drafts or pay orders issued by the Lakshmi Vilas Bank Ltd and remaining unpaid as on 17.11.2020 and towards proceeds of the bills received for collection on or before 17.11.2020.
The Bank can also make payments towards existing liabilities for call money or inter-bank borrowings including letters of credit, which are falling due during the period of moratorium, and make payments towards trades made before the moratorium which are yet to be settled.
However, it cannot extend new loans or advances or invest in credit instruments.
The Reserve Bank of India today announced a Draft Amalgamation Scheme for The Laxmi Vilas Bank with DBS Bank India Ltd, the central bank stated in a press release earlier today.