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Liquidity not an issue at Lakshmi Vilas Bank; Clix loan book had issues: LVB director Shakti Sinha

Clix is a non-banking phenomenon, it works on a different set of rules and a bank has to be governed by the banking regulations and RBI requirements, Sinha said

November 18, 2020 / 09:16 PM IST

The Reserve Bank of India (RBI) on November 17 imposed a moratorium on Lakshmi Vilas Bank (LVB) till December 16, and restricted withdrawals to Rs 25,000 per person irrespective of number of accounts held.

Speaking to CNBC-TV18 on the development, Shakti Sinha, Director at LVB said: “Liquidity position of the bank is very comfortable, liquidity is not the issue. The bank has been making continuous losses for 12 quarters and its capital adequacy has gone into negative territory,”

On Clix Capital deal, Sinha said, “There were substantial differences on the two sides that could not be bridged. Clix is a non-banking phenomenon, it works on a different set of rules and a bank has to be governed by the banking regulations and the Reserve Bank of India (RBI) requirements.”

“Also, the loan book of Clix had issues with large number of unsecured creditors and the quality of collateral and legal requirements etc would not be banking compliant,” he added.