Lakshmi Vilas Bank (LVB) stock was locked in 20 percent lower circuit in the early trade on November 18 after Finance Ministry put the bank under moratorium, with effect from November 17 6 pm till December 16, 2020.
There were pending sell orders of 30,945,341 shares, with no buyers available at the time of market opening.
During this time, the beleaguered bank will not be able to make any payment worth more than Rs 25,000 to its depositors without written permission from the Reserve Bank of India (RBI).
As per the draft scheme of amalgamation of the Lakshmi Vilas Bank (LVB) with DBS Bank India, the entire amount of the paid-up share capital will be written off.
“On and from the appointed date, the entire amount of the paid-up share capital and reserves and surplus, including the balances in the share/securities premium account of the transferor bank, shall stand written off,” according to the draft scheme published on the RBI website.
However, this is only a draft scheme. The final scheme will be prepared after factoring in the feedback from various stakeholders.
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TN Manoharan, former non executive chairman of Canara Bank, has been appointed as the administrator by the Reserve Bank of India (RBI) under Section 36ACA(2) of the Banking Regulation Act, 1949 with effect from November 17.
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At 09:17 hrs Lakshmi Vilas Bank was quoting at Rs 12.45, down Rs 3.10, or 19.94 percent on the BSE.
The share touched its 52-week high Rs 25.18 and 52-week low Rs 10.45 on 30 June, 2020 and 31 March, 2020, respectively.
Currently, it is trading 50.56 percent below its 52-week high and 19.14 percent above its 52-week low.