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How Lakshmi Vilas Bank eroded its wealth amid controversy and losses

How did a profitable bank founded to serve small businesses in 1926 by a group of businessmen from the Vysya community - a trader caste based in southern and central India - come to this pass?

Lakshmi Vilas Bank
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Till about 10 years ago, LVB was a stock market favourite among retail investors. In 2017, its share price touched the Rs 187-mark. Since then, the price has steadily fallen — it is now in the Rs 19-22 range

T E NarasimhanAbhijit Lele Chennai/Mumbai
It has been a year since the Reserve Bank of India (RBI) initiated prompt corrective action (PCA), an exercise that puts weak banks under central bank scrutiny, against the 94-year-old Lakshmi Vilas Bank (LVB). But last week, this low-profile Chennai-headquartered bank found itself attracting some unwonted publicity when 60 per cent of its shareholders voted against a proposal to re-appoint seven directors, including one of the promoters, K R Pradeep (who holds around 2 per cent), and the company’s Managing Director & Chief Executive Officer S Sundar.

On Sunday, the Reserve Bank of India (RBI) approved an interim arrangement under which

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