NEW DELHI: Recovering from a free fall, the shares of Lakshmi Vilas Bank (LVB) gained 5.21 per cent after the lender sought to reassure depositors that it has adequate liquidity. During the day, it declined 5.72 per cent to Rs 18.10, but bounced back to close at Rs 20.20 apiece on the BSE on Monday.
A fresh crisis has hit the bank as shareholders voted against the appointment of seven directors to its board, including its promoters and CEO during an annual general meeting held last week. On Sunday, however, the Reserve Bank of India approved the appointment of three-member Committee of Directors (CoD) to run the daily affairs of LVB. This CoD will exercise the discretionary powers of MD (managing director) and CEO (chief executive officer) in the ad-interim, the bank said in a statement on Monday.
The bank also said its liquidity position as on September 27 was comfortable, with liquidity coverage
ratio (LCR) in excess of 250 per cent i.e. about 262 per cent against minimum 100 per cent required by RBI. “Hence, the bank does not have any asset-liability mismatch and is successfully fulfilling its commitments to deposit-holders, bond-holders, account-holders and creditors,” it added.
This also comes at a time when the bank, which is in desperate need of capital, and was was in the middle of a merger process with PE fund-backed Clix Capital, after an earlier merger proposal with Indiabulls Housing Finance was rejected by the central bank. The troubles started after it shifted its focus to lend to large businesses.