LVB, Syndicate Bk hit 52-wk low as RBI imposes penalty for violating norms

The RBI imposed a monetary penalty of Rs 1 crore on Lakshmi Vilas Bank Ltd for non-compliance with certain provisions of directions issued by RBI on IRAC norms

Shares of Lakshmi Vilas Bank (LVB) and Syndicate Bank slipped up to 5 per cent and hit their respective 52-week lows in the early morning deals on the BSE on Tuesday after banking regulator Reserve Bank of India (RBI) imposed monetary penalty on them for violating asset classification and fraud detection norms.

Individually, shares of LVB were locked in the lower circuit band of 5 per cent at Rs 22.05 apiece, also its new all-time low, while shares of Syndicate Bank dipped up to 2.2 per cent to trade at Rs 24 per share. In comparison, the benchmark S&P BSE Sensex was trading 100 points, or 0.28 per cent, higher at 38,320 level at 9:45 am.

"The Reserve Bank of India (RBI) has, by an order dated October 14, 2019, imposed a monetary penalty of Rs 1 crore on Lakshmi Vilas Bank Ltd for non-compliance with certain provisions of directions issued by RBI on 'Income Recognition and Asset Classification (IRAC) norms," RBI said in a release on Monday. 

In a filing at the exchanges, LVB said the penalty has been imposed "for non-adherence to guidelines on IRAC norms and divergence in respect of two NPA accounts aggregating to Rs 169.50 crores for the year ended 31st March, 2017". READ FILING HERE

For Syndicate Bank, the apex bank said, a penalty of Rs 75 lakh has been imposed for non-compliance with the directions issued by RBI on "frauds classification and reporting; innovative housing loan products wherein upfront disbursal of loans is done".

"The RBI has imposed an aggrgate penalty of Rs 75 lakh on the Bank on account of delay in reporting the fraud to the RBI and upfront disbursal of housing loans in cases of incomplete/under-construction green field housing projects," Syndicate Bank said in a filing post market hours. READ HERE

A total of 13,603 shares changed hands on the LVB counter, while over 2.04 lakh shares changed hands on the Syndicate Bank counter, on the NSE and BSE, till the time of writing of this report.