The Finance Ministry put Lakshmi Vilas Bank (LVB) under moratorium, with effect from 6 pm on November 17 till December 16, 2020. During this time, the beleaguered bank will not be able to make any payment worth more than Rs 25,000 to its depositors without written permission from the Reserve Bank of India (RBI).
Several other banks have been put under moratorium by the Centre earlier, including Yes Bank. Between the year 1947 and 1969, 559 private banks had reportedly failed in India. From then on, 36 private banks have been put under moratorium and several of them have been merged with healthy public sector banks (PSBs).
For example, the merger of the Global Trust Bank with the Oriental Bank of Commerce happened in 2004. In the last 20 years, a total of 10 banks have been put under moratorium before LVB.
Sikkim Bank Limited: In the year 1999, a moratorium was placed on the Sikkim Bank Limited from March 8 to June 5.
Bareilly Corporation Bank Ltd:
On the same day, the RBI had also put the Bareilly Corporation Bank Ltd under moratorium till June 5, which was later extended till March 3, 2000.
Benares State Bank Ltd: On January 22, 2002, the Benares State Bank Limited was put under moratorium by the Centre for two months till April 21, 2002.
Nedungadi Bank: Later that year, on November 2, 2002, a moratorium was imposed on the Nedungadi Bank, which was the first private sector bank to be set up in South India. The moratorium was imposed till February 1, 2003.
South Gujarat Local Area Bank Ltd: A moratorium was imposed on the South Gujarat Local Area Bank Ltd on November 13, 2003 for more than six months till August 12, 2004.
Global Trust Bank: The Global Trust Bank was put under moratorium for three months from July 24, 2004 to October 23, 2004 on grounds of "wrong financial disclosures".
Read: Lakshmi Vilas Bank moratorium: What does it mean, what happens when RBI supersedes board and other questions answered
Ganesh Bank of Kurundwad: The bank was put under moratorium by the Centre from January 7, 2006 to April 6, 2006, which was later extended to October 6, 2006.
United Western Bank Ltd: The Maharashtra-based bank was put under moratorium on September 2, 2006, following an application from the RBI. Withdrawals were capped at Rs 10,000 till December 1, 2006.
PMC Bank: On September 23, 2019, RBI had imposed a moratorium on Punjab and Maharashtra Co-operative Bank (PMC Bank). The moratorium on the bank will be in place till December 22, 2020.Yes Bank:
On March 5, 2020, the Reserve Bank of India had imposed a moratorium on the capital-starved Yes Bank and capped withdrawal limit at Rs 50,000 per account holder.