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LVB Shares Have Fallen 53% Since Placing Under Moratorium

By Staff

On Tuesday, shares of Lakshmi Vilas Bank continued to hit lower circuit-its lowest trading permissible limit for the day- of 9.88% to Rs 7.30 on NSE as well as BSE. The decline comes amid negative sentiments around the company after it was placed under a one-month moratorium.

The stock has tanked 53.35 percent on the NSE since 17 November from Rs 15.55 to Rs 7.30.

LVB Shares Have Fallen 53% Since Placing Under Moratorium

Last week, The government placed LVB under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.

The step was taken on the advice of the Reserve Bank of India, in view of the declining financial health of the private sector lender.

LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March. While Yes bank has successfully been revived under the guidance of State Bank, the PMC resolution is still a far cry.

RBI superseded the Board of Directors of the bank and appointed TN Manoharan (former non-executive chairman of Canara bank) as the Administrator. Later on 17 November, RBI published a draft scheme for amalgamation of LVB with DBS Bank India Limited (DBS).

Meanwhile, on 20 November, credit rating agency, CARE Ratings (CARE) downgraded the rating of LVB's Unsecured Redeemable Non-Convertible Subordinated Lower Tier II Bonds (already Issued by the Bank) and Additional Tier I Bonds (yet to be issued by the Bank) and put them on credit watch with developing implications "in the absence of a credible revival plan".

Read more about: lakshmi vilas bank lvb
Story first published: Tuesday, November 24, 2020, 13:05 [IST]
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