Shares of Lakshmi Vilas Bank (LVB) hit the 20 per cent lower circuit at Rs 12.40 on the BSE in intraday trade on Wednesday, after the government put the private sector lender under moratorium for at least a month.
That apart, the Reserve Bank of India (RBI) on Tuesday proposed to merge LVB with the India subsidiary of Singapore's DBS Bank.
Till 09:17 am, a combined 799,000 equity shares had changed hands on the counter and there were pending sell orders for 35 million shares on the NSE and BSE, exchange data shows.
In a notification on the finance ministry's website, the government said the decision to put the bank under moratorium followed a request from the RBI. The moratorium took effect from 6:00 pm on Tuesday (November 17), and will remain till December 16. During this time, depositors cannot withdraw more than Rs 25,000.
The FinMin order also said that since the bank is now under moratorium, commencement/continuation of all action and proceedings against the bank would be halted, except under necessary circumstances. CLICK HERE FOR GOVERNMENT ORDER
A draft merger proposal, and the final decision will be taken by the RBI after inputs and objections from members, depositors, and creditors of the banks, the central bank said on its website, according to Business Standard report. CLICK HERE TO READ FULL REPORT