Shares of Lakshmi Vilas Bank (LVB) slipped 5 per cent to Rs 19.15 on the BSE in the intra-day trade on Wednesday on concerns Clix Capital’s proposed deal may not materialise after a large section of the bank’s shareholders voted against the reappointment of the top brass.
According to a report by business daily Mint, Clix Capital, which was in advanced talks with LVB for a potential merger, may approach the Reserve Bank of India (RBI) for clarity on the future of the deal after the bank’s shareholders voted out seven board members, including its managing director.
The Reserve Bank of India (RBI) is learnt to have told state-owned Punjab National Bank (PNB) to get ready to take over LVB in case the beleaguered lender’s proposed transaction with Clix Capital does not materialise. Apart from PNB, another public sector bank has been asked to look into the books of LVB, Business Standard reported. However, PNB has clarified that the Bank has not received any such instruction from RBI.
On Sunday, September 27, 2020, the RBI had approved that day-to-day affair of the Bank will be run by a Committee of Directors (CoD) composed of three independent directors. This CoD will exercise the discretionary powers of MD and CEO in the ad-interim.
With a liquidity coverage ratio (LCR) of about 262 per cent as of September 27, 2020, against minimum 100 per cent required by RBI, the deposit-holders, bond-holders, account-holders and creditors are well safeguarded, LVB said.
At 10:55 am, the stock of LVB was trading 4 per cent lower at Rs 19.35 on the BSE, against 0.38 per cent rise in the S&P BSE Sensex. A combined 810,000 equity shares have changed hands on the counter on the NSE and BSE so far.