Shares of Lakshmi Vilas Bank (LVB) were locked in the 5 per cent lower circuit band for the fifth consecutive trading day at Rs 29.85 on the BSE, after the Reserve Bank of India (RBI) initiated prompt corrective action (PCA) against the bank. This stock was quoting at nearly a decade low on the exchange.
The stock of the private lender was trading close to its all-time low price of Rs 26.08 touched on March 4, 2009. In the past five trading days, it has tanked 22 per cent, as compared to a 2 per cent decline in the S&P BSE Sensex.
"The corrective action plan covers various suggestions/measures to recover non-performing assets (NPAs), reduce costs, boost capital, downsize RWAs (Risk-weighted assets) and improve profitability and the management is in the process of implementing all these measures," LVB said in a press release on Saturday.
Further, resignation of Supriya Prakash Sen, director of the bank, too, dented investors' sentiment.
Meanwhile, in a bid to allay the concerns of shareholders and customers, LVB issued a public notice on Tuesday, October 1, stating that the restrictions imposed by the RBI under PCA had no connection with the FIR filed by the Economic Offences Wing (EOW). The EOW had registered the FIR based on a complaint by Religare Finvest Ltd (RFL).
It said that it was initiating appropriate action against RFL, its directors and others for criminal defamation, malicious prosecution and causing disrepute to the bank and directors.
Till 09:46 am, a combined 20,726 shares had changed hands and there were pending sell orders for 2.1 million shares on the BSE and NSE. In the past three-months, the share price of LVB has more-than-halved, as against a 5 per cent decline in the benchmark index.