For Quick Alerts
ALLOW NOTIFICATIONS  
For Daily Alerts

RBI Puts Lakshmi Vilas Bank Under Prompt Corrective Action Framework

|

As per the filing with the exchanges, the private sector lender Lakshmi Vilas Bank has now been pulled under the PCA framework. The action has been taken due to the bank's high leverage, bad loans that are at a high level, weak capital amount as well as negative return on assets.

RBI Puts Lakshmi Vilas Bank Under Prompt Corrective Action Framework
 

And viewing this the lender said " it is hereby informed that the Reserve bank of India, vide their letter dated September 27, 2019 has initiated Prompt Corrective Action for Lakshmi Vilas Bank Limited on account of high net non performing assets, insufficient capital to risk assets ratio and core equity tier-1 ratio, negative return on assets for two consecutive years and high leverage, based on the on-site inspection under the Risk BasedSupervision carried out for the year ended March 31, 2019".

The financial performance of the bank has deteriorated over time and a net loss of Rs. 237 crore has been reported. The banks net NPA are at 8.3% while its capital adequacy ratio stood at 6.46%.

The restriction on the bank have been placed at a time when it is waiting for regulatory approvals for merger with Indiabulls Housing Finance Ltd. At the same time, the lender is facing other issues as well.

On Thursday, the non-banking unit of Religare filed a complaint with the Economic Offences Wing of the Delhi Police that alleged promoters of the former company Malvinder and Shivinder Singh and The Lakshmi Vilas Bank Ltd. for misappropriating nearly Rs 800 crore.

In response to this, the bank in a statement said that it is committed to cooperating with the investigating agencies and regulatory authorities to bring out the "malicious attempts" by Religare Finvest to "mislead the public to cover up massive fraud indulged by their own promoters, employees and group companies."

GoodReturns.in

Story first published: Saturday, September 28, 2019, 13:00 [IST]
Company Search
Get Instant News Updates
Enable
x
Notification Settings X
Time Settings
Done
Clear Notification X
Do you want to clear all the notifications from your inbox?
Settings X
We use cookies to ensure that we give you the best experience on our website. This includes cookies from third party social media websites and ad networks. Such third party cookies may track your use on Goodreturns sites for better rendering. Our partners use cookies to ensure we show you advertising that is relevant to you. If you continue without changing your settings, we'll assume that you are happy to receive all cookies on Goodreturns website. However, you can change your cookie settings at any time. Learn more