What changed
RBI notified that Lakshmi Vilas Bank Ltd was removed from the Second Schedule to the RBI Act, 1934, effective November 27, 2020. The exclusion was formalized via a notification published in the Gazette of India in January 2021.
What it means for you
For banks, this confirms LVB's exit from the scheduled bank list, which typically follows a merger or resolution. Lenders should update their records to reflect LVB's non-scheduled status for regulatory reporting and interbank transactions. This may affect any pending claims or exposures with LVB.
What you must do
- Update internal systems to reflect LVB as a non-scheduled bank from November 27, 2020.
- Review any outstanding interbank exposures or transactions with LVB for compliance.
- Ensure regulatory filings and reports exclude LVB from scheduled bank lists.
- Communicate this change to relevant departments like treasury and risk management.
Who it affects
All scheduled commercial banks, Treasury and operations teams handling interbank dealings, Regulatory compliance departments
What does exclusion from the Second Schedule mean for LVB?
It means LVB is no longer a scheduled bank under the RBI Act, losing access to central bank facilities like liquidity adjustments and priority sector lending benefits.
When did this exclusion take effect?
The exclusion was effective from November 27, 2020, as per the RBI notification.
Do we need to update our records for past transactions with LVB?
Yes, for regulatory accuracy, update records to reflect LVB's non-scheduled status from the effective date, especially for reporting and compliance purposes.