Lakshmi Vilas Bank locked at lower circuit

Chennai based private sector bank, Laskhmi Vilas Bank reported that the RBI has initiated the PCA plans against the bank, on Friday, market hours. The stock was locked in lower circuit at Rs. 34.75 in BSE.

The bank said that, Reserve bank of India (RBI) has initiated Prompt Corrective Action (PCA) for Lakshmi Vilas Bank on account of high Net Performing Assets (NPA), insufficient CRAR and CET 1, negative RoA for two consecutive years and high leverage, based on the on-site inspection under the Risk Based Supervision carried out for the year ended March 31, 2019.

RBI has also advised the Bank on the restrictions put in place and the actions to be taken by the Bank, which the Bank has taken note of for necessary compliance, with progress to be reported on a monthly basis to RBI.

Lakshmi Vilas Bank is one of the oldest private banks in Southern India. It predominantly operates in Tamil Nadu and other Southern parts. The bank had announced the proposed merger with Indiabulls Housing Finance which is still subject to approval of RBI.

Reacting to the news, LVB was down by 5 per cent. While, at 2.45 pm, the Lakshmi Vilas Bank traded down 32 per cent intra-day at Rs. 265 on BSE.