In context of the current ongoing situation around Lakshmi Vilas Bank (LVB) in the media. There have been news that has misrepresented the factual position prevailing in the Bank. Despite this situation, Lakshmi Vilas Bank urges its customers to rely only on communication from the bank and not believe on any misleading news.
The RBI has recently appointed three committee of directors (CoD) who will run the day-to-day affair of the bank. This CoD will exercise the discretionary powers of MD & CEO in the ad-interim. LVB would also like to state that it has sufficient amount of liquidity to meet its commitments towards its stakeholders. It has honoured all its maturing deposits and demand for withdrawal of money, wherever the customers have chosen to withdraw, without any delay. The Bank has also seen rollover of deposits on maturity and also fresh inflows (new deposits).
The Bank is regulatorily responsible to submit to RBI daily reports on liquidity and certain key liquidity ratios. The Liquidity Coverage Ratio (LCR) continues to be above 250% which is an indication of the liquidity position of the Bank. While the regulatory minimum requirement is 100%, good banks tend to maintain higher percentage. The bank would like to inform that we have not seen any significant outflows in the last one week. The bank does not carry any assets-liability mis-match.
The Regulator (RBI) is monitoring the funds/liquidity position very frequently and has not observed anything of concern in the bank. The Bank is regulatorily mandated to keep 21% of its liabilities with RBI in both Cash and Securities which has been maintained at a ratio far higher than this minimum requirement.
LVB has serviced its interest obligations to the Tier II bond holders on Wednesday (September 30, 2020) and paid Rs. 15 Cr as interest. It has never defaulted in any such obligations so far.
The bank is on the final stages of raising fresh capital. There are few due diligences in process and should soon announce the capital infusion. LVB would like to assure all the depositors that taking care of their interest is the bank’s prime responsibility.