Three messages from the Lakshmi Vilas Bank deal

It sends a strong signal to promoters and influential investors in the not-so-well-run banks to behave or lose their shirt

Last Tuesday, the Reserve Bank of India (RBI) declared a moratorium on Lakshmi Vilas Bank Ltd (LVB). Before any of its depositors could think of rushing to the nearest ATM to withdraw money, the central bank released a draft scheme to merge the insolvent old private bank with DBS Bank India Ltd (DBIL), the Indian arm of DBS Bank Ltd, Singapore, and appointed an administrator, superseding its board. The moratorium is for 30 days but the merger could happen much earlier; the deadline for raising objections to the scheme and making suggestions has already expired.

Nobody would shed a tear for