I wonder how people are fooled into believing that this bank's collapse is linked to Covid! Let me tell you it has nothing to do with this pandemic situation. A bank can't fail for few months of bad performance. Let me tell you that there are more small scale banks are just waiting in the queue to declare themselves are bankrupt!
That is the magic of politicians who only open their mouth to lie and then if they have a blind following who can shill their every decisions and have an IT cell that could spread fake news and propaganda and some could be fooled if they keep repeating the process. The bank in question here is Lakshmi Vilas Bank and they are struggling for a few years and if i remember correctly the DBS made the proposal last year and still they are in talks with the RBI.
It is happening because of the tremendously bad leadership of the BJP government. India is a country where we have a Ministry for cows! It is a country where building a temple become a matter of national importance rather than building a factory. India is a country where government has no money to provide basic healthcare but has enough money to kick-off central vista project worth few thousand crores.
Not just cows, but a huge shelter and toilet for crows spending thousands of crores (Statue of Unity) while many are struggling to make ends meet and i think they are building such shelters around India
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The main reason why Lakshmi Vilas Bank failed was because the bank shifted it's focus from SMEs to Big Houses. The bank lent over 700 crores to Ranbaxy and Fortis and both parties defaulted loan repayment. LVB having less capital couldn't revive from the loss.
Why was a major decisions to change the policies and this is not the only bank that is suffering from huge default loan repayments. Who knows how many politicians and bureaucrat earned commissions for sanctioning these loans.