What is a moratorium?

On November 17, the Centre, acting on the recommendation of the Reserve Bank of India (RBI), imposed a moratorium on Lakshmi Vilas Bank (LVB) for a period of 30 days. The 94-year-old bank, based in Karur, Tamil Nadu, has been struggling with losses for three years. As its financial position deteriorated, the regulator placed it under the Prompt Corrective Action (PCA) framework, which restricts certain operations depending on the severity of financial stress. After allowing time for the bank to find investors to shore up its capital, the RBI has appointed an administrator for the bank and mooted a merger with the Indian subsidiary of the Singapore-based DBS Bank. Similar moratoria were placed in the recent past on other lenders too, including Yes Bank and Punjab and Maharashtra Co-operative Bank. Read more here: https://www.thehindu.com/business/Economy/the-hindu-explains-what-is-a-bank-moratorium-and-when-does-it-come-into-play/article33151740.ece Thank you for watching our video! You can subscribe to our channel here: https://bit.ly/3c8Adi6 Visit https://www.thehindu.com/ for the latest updates, analysis, opinions, and more. The Hindu is committed to keeping you up-to-date with information on the developments in India and the world. We promise to deliver quality journalism that stays away from vested interest and political propaganda. You can support us by subscribing to our digital offerings here: https://bit.ly/3emywiz Follow us: Twitter: https://twitter.com/the_hindu Instagram: https://www.instagram.com/the_hindu/