Shares of Lakshmi Vilas Bank (LVB) hit the 20 percent lower circuit on Wednesday after the Reserve Bank of India (RBI) brought it under moratorium effective 6 pm, November 17, until December 16. The apex bank also announced a draft scheme of amalgamation of Lakshmi Vilas Bank with DBS Bank India.
The stock traded 20 percent lower at Rs 12.45 per share on the NSE in the early trade.
The moratorium has been imposed on the basis of an application submitted by RBI under Sec 45 of BR Act. Withdrawals by account holders and creditors have also been capped at Rs 25,000 during the moratorium period.
Account-holders can withdraw above Rs 25,000 only for unforeseen expenses including medical treatment, education etc, an official statement said.
The central bank has assured depositors of LVB that their interest will be fully protected and has asked depositors not to panic. RBI will put a Scheme of Amalgamation in place well before the expiry of the moratorium and will ensure depositors are not put through undue hardship or are inconvenienced for longer than absolutely necessary, it said.
On the merger front, the central bank has invited suggestions and objections, if any, from members, depositors and other creditors of transferor bank (LVB) and transferee bank (DBIL), on the draft scheme.
The draft scheme has also been sent to the transferor bank and transferee bank for their suggestions and objections. The suggestions and objections will be received by the Reserve Bank up to 5 pm on November 20, 2020.