Last updated: 18 Nov, 2020 | 10:57 am
The RBI has put Lakshmi Vilas Bank (LVB) under a moratorium, with effect from 6 pm on 17 November till 16 December. The depositors will not be allowed to withdraw more than ₹25,000 till the moratorium gets over. The bank will also get merged with DBS. As per the draft scheme proposed by the RBI, the paid-up share capital and reserves and surplus of Lakshmi Vilas Bank shall be written off, from the date the merger comes into effect. Accordingly, the shares of Lakshmi Vilas Bank will get delisted from the exchanges and will be valued at zero.
Why has this happened?
To be merged with DBS India
Lakshmi Vilas Bank has been under severe financial stress for the past few years. Last month, INDmoney had cautioned investors to exit their holdings in the shares, after Brickwork Ratings India had downgraded the ratings on Lakshmi Vilas Bank (click on View Blog below)
The shares of Lakshmi Vilas Bank will get delisted from the exchanges and will be valued at zero. We recommend that you exit your investments in Lakshmi Vilas Bank shares. The shares lost 20% to hit lower circuit of ₹12.45 on BSE this morning.
This event could put further pressure on the lenders to Lakshmi Vilas Bank. Religare Enterprises Ltd’s NBFC arm Religare Finvest Ltd (RFL) has about Rs 950 crore dues pending from debt-ridden Lakshmi Vilas Bank (LVB).
Indiabulls Housing Finance holds a 4.99% equity stake in the bank, while Srei Infrastructure Finance holds 3.34% and Capri Group holds 3.82%. (This advisory was sent to shareholders of Lakshmi Vilas Bank, Religare Enterprises, Capri Global and Indiabulls Housing Finance on 18th November)