Frauds of Lakshmi Vilas Bank.


Introduction to the case:
The case was listed on 28 September 2019 by the Delhi Police’s Economic Offence on the Lakshmi Vilas Bank. According the report the bank has high level of bad loans and low capital to manage risks and negative returns on assets for two consecutive years. According to the Delhi Police’s Economic Offence has said that the board of LVB is cheating and misusing of the funds.

The regulatory action may cast doubt over the Indianbulls Housing Finance which proposed the merger with LVB and waiting for the RBI norms. PCA initiated after an on spite inspection, under the risk based supervision which was carried out 31 march 2019. For the fiscal year 2019 the bank net NPA stood at 7.49 percent, capital adequacy ratio was at 7.72 percent and net loss was 894.10 crore. PCA aimed to improve the performance of the bank and will not have any adverse impact on the day to day operations of the bank. Banks currently under PCA are Union Bank Of India, IDBI Bank, Indian Overseas Bank, Central Bank of India and UCO Bank.

Some Key Points of the case:
  •  Company having high NPA value and not having enough capital to maintain the negative returns and manage risks.
  • The Bank is running on the bad debts for two years.
  • Bank has not taken any steps to solve the problem and try to overcome the loss.
  • The Board member were mis-using the funds.
What steps should bank take:
  • The board should use the authority in proper way.
  • The Bank should take some steps for increasing its capital and proper using of funds.
  • The Bank should overcome the losses and should give loans to the company which can pay back in the future.
  • The bank should decrease the interest on FD and saving account such that it overcome some part of its loss.
  • The bank should try to recover the NPA’s with its full efforts.
  • The bank should keep all its accounts transparent.


Comments

Post a Comment

Popular posts from this blog

Money Laundering Case Of D K Shivakumar

Image
Today’s World is filled with frauds and scams many people suffer by falling in to this and they don’t know how to overcome from the situations. In the last blog we talk about the PMC Bank and this also related to Banking sector. This case happened in the Karnataka Co-op Bank and in this case we will more concentrated about some ethical issues.   Introduction to the Case Firstly, let me introduce with the case. This is case regarding the Karnataka MLA D K Shivakumar who have involved in money laundering case. The victim has caught on 3 rd September 2019 and has been taken in the custody. Nearly a year ago the D K Shivakumar took loan from Karnataka Co-op Bank for his some of his sugar factories and he had never paid any amount to the bank later they found that he was doing money laundering. The officials have also found out another thing that the president bank K N Rajanna is also involve in this case. As we all know that banks run for the welfare of the societ...
Read more

Nifty 50 Analysis for 20th June 2022

Image
Let's understand market on the basis of price action, first thing to observe is market is trend. On the daily time frame we see the swings highs and lows we observe that market is forming Lower Highs and Lower Lows structure this indicates market is in bearish trend  So we have got to know about the trend of the market next thing to observe is previous day candle (i.e 17th June 2022) we can see market as formed doji this indicates that there was fight between bulls and bears and no one has won in the battle and formed indecision candle.  Let's observe market in one hour time frame here we see market is consildating the range of 15400 to 15180 if market opens side ways and break on the either side we can take position in that direction. There two was to approach in this situation either you can go with breakout trade or else you can go with the pull back trade. It depends on the individual risk managment and conviction about the trade. If market opens in the range then only we ...
Read more