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LVB stock market suspension: Trading in Lakshmi Vilas Bank shares to be suspended from Thursday: NSE

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Trading in shares of Lakshmi Vilas Bank will be suspended from November 26, the National Stock Exchange (NSE) said in a statement.

“Members of the Exchange are hereby informed that the trading in equity shares of Lakshmi Vilas Bank Limited shall be suspended w.e.f November 26, 2020 (i.e. closing hours of trading on November 25, 2020) on account of gazette notification dated November 25, 2020 issued by Department of Financial Services, Ministry of Finance,” NSE said.

Earlier in the day, the Reserve Bank of India said the amalgamation of the bank with DBS Bank India will come into force from November 27 and the moratorium imposed on the crisis-ridden lender will be removed on that day.

The RBI issued the statement within hours of the Cabinet clearing the Scheme of Amalgamation of Lakshmi Vilas Bank Limited (LVB) with DBS Bank India Limited (DBIL).

“The amalgamation will come into force on the appointed date, i.e., November 27, 2020. All the branches of the Lakshmi Vilas Bank will function as branches of DBS Bank India with effect from this date,” the RBI said.

Depositors of LVB will be able to operate their accounts as customers of DBS Bank India with effect from Friday.

“Consequently, the moratorium on the Lakshmi Vilas Bank will cease to be operative from that date,” it said.

The RBI had superseded the board of LVB on November 17 following the imposition of a moratorium on the private sector lender.

DBS Bank India is making necessary arrangements to ensure that services, as usual, are provided to the customers of Lakshmi Vilas Bank, the RBI added.

As of end of September, a total of 12 foreign institutional investors (FIIs) held 8.65 per cent stake in the bank. They have consistently reduced their holding in the bank since at least 5 quarters from 16.45 per cent at the end of June quarter. Mutual funds on the other hand, hiked their stake in the lender to 6.40 per cent in the September quarter, from 4.78 per cent in the quarter before.

Retail investors have been consistently raising their stake in the lender so far this year, and own nearly 23.98 per cent stake, compared with 21.14 per cent at the end of December 2019.

Earlier this month, LVB said its net loss widened to Rs 397 crore in the quarter ended September, compared with a net loss of Rs 357 crore in the year-ago period. Its net interest income dropped 28 per cent to Rs 79.5 crore. The gross NPA stood at 24.45 per cent as at end September, compared with 21.25 per cent a year ago.

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