Shares price of private lender Lakshmi Vilas Bank on Wednesday tanked to hit the lowest permissible limit of trading after the government placed it under a one-month moratorium and superseded its board.
The scrip cracked 20 per cent on BSE to hit its lower circuit limit of Rs 12.4. Similarly NSE, the shares plunged 19.94 per cent to lock in the lower circuit of Rs 12.45.
On Tuesday, the government placed Lakshmi Vilas Bank under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.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 Reserve Bank of India has also placed in public domain a draft scheme of amalgamation of Lakshmi Vilas Bank with DBS India, wholly-owned subsidiary of DBS Bank Ltd, Singapore (DBS). This step was taken keeping the deteriorating financial condition of the bank in mind.