Lakshmi Vilas Bank placed under prompt corrective action by RBI; key things to know

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Updated: September 28, 2019 1:03:52 PM

Lakshmi Vilas Bank on Friday said that the Reserve Bank of India (RBI) has initiated prompt corrective action (PCA) against it.

It does seem that India’s government yield of 6-6.5% could continue to draw investment interest, despite the fumbling economy and nervous rupeeShares of Lakshmi Vilas Bank on Friday closed the intrade day trade at Rs 36.50, down 1.90 points, or 4.95 per cent on NSE.

Lakshmi Vilas Bank on Friday said that the Reserve Bank of India (RBI) has initiated prompt corrective action (PCA) against it. It comes a day after the private lender said that the economic offences wing of the Delhi Police is investigating allegations of cheating against its board directors. “The RBI has also advised the bank on restrictions put in place and the actions to be taken. The bank has taken note of for necessary compliance with progress to be reported on a monthly basis to RBI,” Lakshmi Vilas Bank said in an exchange filing on Friday night.

“The prompt corrective action is aimed at improving the performance of the bank and will not have any adverse impact on the normal day-to-day operations, including acceptance or repayment of deposits in the normal course,” Lakshmi Vilas Bank also said in the statement. Shares of Lakshmi Vilas Bank on Friday closed the intrade day trade at Rs 36.50, down 1.90 points, or 4.95 per cent on NSE.

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On Friday, the bank slammed Religare Finvest (RFL) for moving the Economic Offences Wing to get an FIR registered against the bank and its directors. The private lender also said that it is committed to cooperating with the investigating agencies and regulatory authorities in order to bring out the malicious attempts of RFL to mislead the public to cover up massive fraud indulged in by their own promoters, employees and group companies. Meanwhile, the bank’s net loss widened to Rs 237 crore in the first quarter of FY20, mainly on account of higher provisioning and lower growth in net interest income. The private lender had registered a net loss of Rs 124 crore in the same period last financial year (FY19).

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