Lakshmi Vilas Bank was locked in 5% lower circuit at Rs 22.05 after the RBI imposed a penalty of Rs 1 crore on the bank.
Lakshmi Vilas Bank (LVB) said that the Reserve Bank of India (RBI) has imposed a penalty of Rs 1 crore on the bank for non-adherence to guidelines on IRAC norms and divergence in respect of two NPA accounts aggregating to Rs 169.50 crore for the year ended 31 March 2017. The announcement was made after market hours yesterday, 14 October 2019.
Shares of LVB have slumped 42.65% to its current market price of Rs 22.05 in eleven trading sessions, from a recent closing high of Rs 38.45 on 26 September 2019.
On 11 October 2019, LVB informed that CARE Ratings has revised the rating from "CARE BBB- (Credit Watch with developing implications) to CARE BB+; negative for its unsecured redeemable nonconvertible subordinated lower tier II bonds.
The credit rating agency reviewed the ratings assigned to the proposed Basel III compliant additional tier I perpetual bond issue of the bank from CARE BB- (Credit watch with developing implications) to CARE B+: Negative.
The Reserve Bank of India (RBI), in its letter dated 9 October 2019, had ruled that the voluntary amalgamation of Indiabulls Housing Finance and Indiabulls Commercial Credit with The Lakshmi Vilas Bank cannot be approved.
In April 2019, LVB announced the plan of amalgamating Indiabulls Housing Finance and Indiabulls Commercial Credit with LVB. Later, the bank had sought RBI's approval on 7 May 2019 for the proposed amalgamation.
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On 30 September 2019, RBI placed LVB under prompt corrective action (PCA) framework with effect from 27 September 2019.
Meanwhile, the S&P BSE Sensex was up 364.26 points or 0.95% to 38,578.73.
On the BSE, 1,950 shares were traded in the counter so far compared with average daily volumes of 5,663 shares in the past two weeks. The stock hit a high of Rs 22.1 so far during the day. The stock has hit an intraday low of Rs 22.05, which is also an all-time low for the scrip. The stock hit a 52-week high of Rs 97.35 on 09 Apr 2019.
LVB reported a net loss of Rs 237.25 crore in Q1 June 2019 over a net loss of Rs 123.87 crore in Q1 June 2019 over Q1 June 2018. Total income fell 14% to Rs 677.17 crore in Q1 June 2019 over Q1 June 2018.
LVB is a scheduled commercial bank. As on 30 June 2019, Lakshmi Vilas Bank had 569 branches, 5 extension counters, 1047 ATMs in 18 states and 1 union territory. The bank offers various bouquets of products and services.
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