RBI puts Lakshmi Vilas Bank under PCA norms

0
68

NEW DELHI: The Reserve Bank of India (RBI) has initiated prompt corrective action (PCA) against Lakshmi Vilas Bank (LVB) after its directors are being probed for alleged fraud, the private lender said in a statement to exchanges on Saturday.

The Economic Offences Wing of Delhi Police is probing allegations of cheating and criminal breach of trust against its directors of the board. The FIR filed is based on a complaint filed by M/s Religare Finvest Limited (RFL) pertaining to adjustment of their deposits to the dues of M/s RHC Holding Pvt Ltd and M/s Ranchem Pvt Ltd.

Delhi cops file case against LVB on Religare complaint

The Economic Offences Wing (EOW) of the Delhi Police has registered a first information report (FIR) against the board of directors of private sector lender Lakshmi Vilas Bank (LVB) on charges of cheating, criminal breach of trust and criminal conspiracy.

“In compliance of Clause 2(B) of the Bank’s Policy for determining materiality of events read with Regulation 30 of the SEBI (Listing Obligation and Disclosure Requirements) Regulations 2015, 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 NP A, insufficient CRAR and CET 1, negative RoA for two consecutive years and high leverage, based on the on-site inspection under the Risk Based Supervision carried out for the year ended March 31, 2019 in terms of RBl/2016-17/276 DBS.CO.PPD.BC.No.8/11.01.005/201-17 dated April 13, 2017,” the bank stated.

“RBI has also advised the bank on the restrictions put in place and the actions to be taken by the bank” which needs to be reported on a monthly basis to the central bank, LVB added.
The PCA is aimed at improving the performance of the bank and will not have any adverse impact on the normal day-today operations, the lender further stated.
The Reserve Bank initiates PCA against banks over weak financial performance for a certain period on parameters of capital ratios, asset quality and profitability.
Shares of the private lender tanked as much as 4.94 per cent on the BSE index on Friday.

LEAVE A REPLY

Please enter your comment!
Please enter your name here