Following an application submitted by the Reserve Bank of India (RBI), the Central government on Tuesday brought Lakshmi Vilas Bank under 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 notification also stays the commencement or continuance of all actions and proceedings against Lakshmi Vilas Bank.
A customer of Lakshmi Vilas Bank said he is worried as withdrawal limit is capped at Rs 25000 till Dec 16. "We know nothing will go wrong but Rs 25000 withdrawal limit is very less. RBI has to take some measures so our daily life is not affected," says Sunil, a customer.
Another customer in Rameswaram, Tamil Nadu said, "Rs 25000 withdrawal is difficult as it's a tourist spot. Request authorities to raise it"
While a customer of the bank, in Madurai, said "We were shocked. Withdrawal of Rs 25000 is inadequate during this time when people are in need of money."