RBI bans Kotak Mahindra Bank from on boarding new online customers
However, the RBI (Reserve Bank of India) said the bank shall continue to provide services to its existing customers, including its credit card customers.
The value of shares of Lakshmi Vilas Bank continued to fall due to the selling pressure for the seventh day in a row and have tanked over 55 per cent during the period amid negative reports revolving around the company.
On Wednesday, the stock on the BSE plunged 4.79 per cent to Rs 6.95, its lower circuit limit as well as one-year low, on BSE. Similarly, on NSE, it dropped 4.79 per cent to Rs 6.95, its lowest permissible trading limit for the day.
Since last Tuesday (November 17), the stock has tanked 55.59 per cent on the BSE. On the same day, the government placed Lakshmi Vilas Bank under a one-month moratorium, superseded its board and capped withdrawals at Rs 25,000 per depositor.
Advertisement
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.
Besides, the Reserve Bank of India has also placed in public domain a draft scheme of amalgamation of Lakshmi Vilas Bank with DBS India, wholly-owned subsidiary of DBS Bank Ltd, Singapore (DBS). This step was taken keeping the deteriorating financial condition of the bank in mind.
LVB is the third bank to be placed under moratorium since September last year after the cooperative bank PMC in 2019 and private sector lender Yes Bank this March. While Yes bank has successfully been revived under the guidance of State Bank, the PMC resolution is still a far cry.
Advertisement
