Lakshmi Vilas Bank shares slump 20% to hit lower circuit in early trade

Shares of Lakshmi Vilas Bank slumped further and fell 20 per cent to hit its lowest permissible trading limit in early trade on Thursday after the government placed the lender under a one-month moratorium and superseded its board.

The shares plunged 19.76 per cent on BSE to hit its lower circuit limit of Rs 9.95.

Similarly, on NSE the scrip hit a lower circuit of Rs 10, diving 19.68 per cent.

Meanwhile, Capri Global Holdings, a public shareholder of the lender sold shares worth Rs 2.54 crore on Wednesday through a bulk deal on BSE. The shares were picked up by Besseggen Infotech LLP, the data showed.

This is the third consecutive session of loss for Lakshmi Vilas Bank, during which it has dropped over 36 per cent.

On Tuesday, the government placed Lakshmi Vilas Bank under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.

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

T N Manoharan, former non-executive chairman of Canara Bank, has been appointed as the administrator of the bank.

Besides, the central bank has also placed in public domain a draft scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank.

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.