LVB gets RBI approval for 'Committee of Directors'

 LVB gets RBI approval for 'Committee of Directors' to manage the bank

- Assures a comfortable liquidity position and safety of depositors money

The Reserve Bank of India (RBI) has approved that, day-to-day affair of Lakshmi Vilas Bank will be run by a Committee of Directors (CoD) composed of three independent directors. This CoD will exercise the discretionary powers of MD & CEO in the ad-interim and is composed of:

 1. Smt. Meeta Makhan - Chairperson of the Committee of Directors

2. Shri Shakti Sinha - Member

3. Shri Satish Kumar Kalra – Member

 With Liquidity Coverage Ratio (LCR) of about 262% as on 27th September 2020, against minimum 100 % required by RBI, the deposit-holders, bond-holders, account-holders and creditors are well safe guarded.

 Lakshmi Vilas Bank will continue to share information on the developments in public domain as and when they materialise, and as required by applicable law.

Views of Mr. R.K.Gurumurthy, Head – Treasury,

Views of Mr. R.K.Gurumurthy, Head – Treasury, Lakshmi Vilas Bank on the RBI announcement today

“Continuing from where it left, the v.2 of additional monetary support from RBI to address the COVID-19 economic collapse, came with a specific objective of channelizing liquidity to credit oriented schemes. RBI has assured continuation with super-easy liquidity and softer rates policy to ease financial stress.

Reverse Repo rate has been cut by 25 basis so that the corridor now becomes 90 basis. The system has roughly 7 trillion of excess liquidity that are parked at RBI's reverse repo window. Today's cut is a disincentive to overnight investments and should find way into credit. Additional TLTRO of 50,000 Cr has been announced and is likely to continue. LCR requirement has been lowered to 80% until October 2020 - thereby releasing the pressure for banks to divert a larger part of their investments in HQLA.

Measures towards further relaxing NPA recognition norms and additional refinance facility to NABARD etc will help in deferring NPA recognition and also help rate transmission better. 

In recent times, yields on GSecs have hardened leading to sharp increase in the borrowing costs of several state governments. The spread over overnight repo is close to historic highs and therefore warranted strong action. The relaxation in WMA guidelines would go some distance towards addressing this.”