Share of Lakshmi Vilas Bank tanked in early trade today after the Reserve Bank of India (RBI) put the lender under moratorium for 30 days, effective from 6:00 pm on November 17 till December 16. Under the moratorium, RBI has restricted withdrawals at Rs 25,000. Depositors with more than one account will be allowed to withdraw only Rs 25,000 from all their accounts.
Lakshmi Vilas Bank stock hit lower circuit of 20% in opening trade on BSE. The banking stock opened 20% lower at Rs 12.40 against previous close of Rs 15.50.
There were only sell orders with no buyer initiating trade on the stock.
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The banking stock was trading lower than 5 day, 20 day, 50 day, 100 day and 200 day moving averages. In one year, the micro cap share has lost 36.73% and fallen 28.12% since the beginning of this year.
In a week, the stock has tanked 21.02%.
Total 10.90 lakh shares changed hands amounting to turnover of Rs 1.35 crore. Market cap of the bank fell to Rs 417.523 crore.
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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.