The limit has been increased from Rs 1.6 lakh for urban or semi-urban areas to Rs 2 lakh, the RBI said in a circular.
RBI has also proposed that FASTags would be enabled to pay for parking fee and even at fuel stations.
With the above relaxation, more than 78 per cent of the depositors of the bank will be able to withdraw their entire account balance.
On Monday, when the petition came up for hearing, the bench said it only wanted to know what the RBI was doing in the case.
Reserve Bank had separate departments for supervisory, regulatory functions which were integrated into two unified departments.
Banks may further cut deposit rates to protect their margins as lending rates continue on a downward trajectory.
The value of the gold reserves increased by USD 82 million to USD 26.861 billion for the week, the RBI said.
With this, about 77 per cent of the depositors will be able to withdraw their entire account balance, said RBI.
The interest rate will range from 8.25 to 8.65 percent depending on the borrower.
LVB is under the prompt corrective action framework of RBI since last month for low levels of capital buffers.