Lakshmi Vilas Bank shares bounce back, jump nearly 5%

Lakshmi Vilas Bank shares bounce back, jump nearly 5%

On the NSE, the scrip rose 4.79 per cent to close at Rs 7.65

In early trade on Wednesday, the stock had tanked 4.79 per cent to Rs 6.95, its lower circuit limit as well as one-year low, on the BSE. Credit: Reuters Photo

Shares of Lakshmi Vilas Bank bounced back on Wednesday after falling for almost a week, rising by nearly 5 per cent following the government's approval for the crisis-ridden bank with DBS Bank India Ltd (DBIL).

In early trade on Wednesday, the stock had tanked 4.79 per cent to Rs 6.95, its lower circuit limit as well as one-year low, on the BSE.

However, it recovered all its lost ground in the afternoon trade, gaining 4.79 per cent to close at Rs 7.65 -- its upper circuit limit.

On the NSE, the scrip rose 4.79 per cent to close at Rs 7.65. Earlier in the day, it had fallen 4.79 per cent to Rs 6.95.

The stock tanked 53.35 per cent on the BSE between November 17 to November 24.

The government on Wednesday approved the merger of Lakshmi Vilas Bank (LVB) with DBIL, with Union minister Prakash Javadekar asserting that there will be no further restrictions on depositors regarding withdrawals other than the current moratorium.

Also read: Centre approves amalgamation of Lakshmi Vilas Bank with DBS Bank India Ltd

The minister also assured depositors that Rs 20,000 crore of deposits with LVB are fully secured and they should not worry.

DBIL, a wholly-owned subsidiary of Singapore-based DBS Bank Ltd, had a total regulatory capital of Rs 7,109 crore as of June 2020.

The government had earlier on November 17, on the advice of the RBI, imposed a 30-day moratorium on LVB, restricting cash withdrawal at Rs 25,000 per depositor.

The RBI simultaneously placed in public domain a draft scheme of amalgamation of LVB with DBIL. The RBI had also superseded the board of the bank.