NEW DELHI: Shares of Lakshmi Vilas Bank (LVB) plunged as much as 20 per cent — lower circuit — on Wednesday after the Reserve Bank of India (RBI) imposed a 30-day moratorium on the cash-strapped lender, restricting cash withdrawals at Rs 25,000 per month.
On the BSE index, LVB stock fell 20 per cent or Rs 3.10 to Rs 12.40; while on NSE it crashed 19.94 per cent or Rs 3.10 to 12:45.
After putting LVB under moratorium, the Reserve Bank simultaneously announced a scheme to merge the lender with DBS India, a wholly-owned subsidiary of DBS Bank Ltd, Singapore (DBS).
The step was taken on the advice of the RBI in view of the private sector bank’s deteriorating financial health.
The Reserve Bank also superseded the board of LVB and appointed TN Manoharan, former non-executive chairman of Canara Bank, as its administrator for 30 days.
DBS Bank India, in a statement, said the proposed amalgamation will provide stability and better prospects to LVB’s depositors, customers and employees.
LVB is the second private sector bank after Yes Bank which has run into rough weather during this year.
In March, capital-starved Yes Bank was placed under a moratorium. The government rescued it by asking state-run SBI to infuse Rs 7,250 crore and take 45 per cent stake in the bank.
(With PTI inputs)
Source From : Times Of India