‘After Lakshmi Vilas Bank, RBI must act promptly in Dhanlaxmi Bank’

Lakshmi Vilas Bank was on Tuesday put under a 30-day moratorium amid financial and governance concerns. Reserve Bank appointed its own administrator to run the bank affairs, and proposed its merger with DBS Bank India. Lakshmi Vilas Bank follows the suit of Yes Bank, PMC Bank, DHFL and IL&FS, where RBI had to intervene. What does the RBI’s decision to rescue LVB imply for its shareholders? Could the regulator have stepped in earlier? Where is LVB headed in the days to come? Lastly, what are the lessons from this episode for the banking sector?