Share price of the Lakshmi Vilas Bank continued to plunge on Monday and have tanked over 48 per cent during this time as investors continued to desert the counter amid host of negative news surrounding the company.
On the BSE, the stock plunged 10 per cent to Rs 8.10, hitting its lower circuit limit as well as one year low.
Similarly, on the NSE, it tumbled 10 per cent to Rs 8.10, its lowest trading permissible limit for the day.
In five trading days, the stock has tanked 48.24 per cent on the BSE.
The government on Tuesday placed Lakshmi Vilas Bank under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.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 central bank has also placed in public domain a draft scheme of amalgamation of Lakshmi Vilas Bank with DBS 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.
LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March. While Yes bank has successfully been revived under the guidance of State Bank, the PMC resolution is still a far cry.