SKS Microfinance scrip tanks 5%

SKS Microfinance today tumbled over five per cent in the afternoon trade at the Bombay Stock Exchange, after the Andhra Pradesh Police arrested three people working with it and another small lender Spandana, on a complaint of harassment by a borrower.

Shares of SKS Microfinance, the only listed microfinance entity in the country, took a sharp hit and plunged by 5.11 per cent to touch a month's low of Rs 1,050 on the BSE in the noon trade.

The Andhra Pradesh Police also said that it might book the promoters -- Vikram Akula of SKS and Padmaja Reddy of Spandana -- under a new Ordinance that aims at checking coercive methods of loan recovery by small lenders.

SKS scrip had opened the session on a positive note, but went into a tailspin on the news of the arrest.

On the National Stock Exchange, the company was trading at Rs 1,067, down 3.73 per cent.

The case was filed by the borrower, Ammulu, last night under Section 16 of the AP Microfinance Institutions (Regulation of Money Lending) Ordinance-2010. SKS Microfinance is holding its board meeting today.