Following an application submitted by the Reserve Bank of India (RBI), the Central government on Tuesday brought Lakshmi Vilas Bank under a moratorium for 30 days, and restricted withdrawals by depositors to Rs 25,000 each.
The Centre issued the moratorium notification under Section 45 (2) of the Banking Regulation Act, 1949. The moratorium came into effect from 6 p.m. on Tuesday and will be in place up to December 16, 2020.
The Department of Financial Services, in a gazette notification, said LVB "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 lying to his credit, in any savings, current or any other deposit account" during the moratorium period up to December 16, 2020.
However, the bank can make payment over Rs 25,000 to meet unforeseen expenses in connection with medical treatment of a depositor or any dependent person, or towards the cost of higher education of the person/dependants.
Here is how you can withdraw more than Rs 25,000?
According to the notification, the RBI may by a general or special order permit Lakshmi Vilas Bank to allow pay to its depositors an amount above Rs 25,000 to meet unforeseen expenses towards (a) medical treatment of the depositor or any person dependent on him (b) towards the cost of higher education of the depositor or any person dependent on him for education in India or outside India; (c) to pay obligatory expenses in connection with marriage or other ceremonies of the depositor or his children or of any other person dependent upon him (d) in connection with any other unavoidable emergency if there is sufficient credit in his account. However, the sum such paid shall not exceed Rs 5 lakh or the actual balance lying to the credit of the account of such depositor, whichever is less.
(Inputs from Agencies)