“The ratings assigned to the various debt instruments of The LVB have been placed on credit watch with developing implications with the moratorium imposed by Government of India (Gol) on LVB, after considering an application made by the Reserve Bank of India (RBI). RBl's action comes on the backdrop of significant deterioration in the financial risk profile of the bank with weakened capitalisation levels and in the absence of a credible revival plan,” CARE said in detailed rationale.
The RBI has superseded the Board of Directors of the bank and appointed TN Manoharan (former non-executive chairman of Canara bank) as the Administrator and on November 17, 2020, RBI published a draft scheme for amalgamation of LVB with DBS Bank India Limited (DBS).
The extinguishment of capital/reserves and merger with an unlisted bank will be negative for minority investors in LVB, the larger interest of depositors has been protected.
Till 10:19 am, a combined around 735,000 shares had changed hands and there were pending sell orders for 18 million shares on the NSE and BSE, the exchange data shows. In comparison, the S&P BSE Sensex was trading flat at 43,895 points.
Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.
As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.
Support quality journalism and subscribe to Business Standard.