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Money News

Lakshmi Vilas Bank's shares fall after RBI okays committee to run lender

BENGALURU (Reuters) - Shares of Lakshmi Vilas Bank Ltd fell more than 6% on Monday, after the country’s central bank okayed a three-member committee of directors to run the private lender after its shareholders voted out seven directors.

Lakshmi Vilas, which has been struggling with bad loans and governance issues, said on Sunday its shareholders had voted out seven directors, including rejecting the reappointment of its chief executive officer.

The Reserve Bank of India (RBI) said a panel of three independent directors will manage day-to-day affairs at the lender and exercise the discretionary powers of the managing director and CEO. (bit.ly/3kW6c9Y)

Board member appointments for the company had been up for voting on Sept. 25, at its annual general meeting.

Lakshmi Vilas’ stock fell as much as 6.3%, knocking off more than 400 million rupees ($5.43 million) from its market capitalization, before recovering most of its losses on Monday.

The Chennai-based lender, which is in need of capital, has been trying to find a buyer for a year.

The bank was approached by Clix Capital in June for a possible stake purchase, according to media reports, while earlier, RBI had rejected a proposal for it to merge with Indiabulls Housing Finance Ltd.

Lakshmi Vilas’ liquidity coverage ratio was about 262% as of Sept. 27, against the minimum 100% required by RBI, the company said on Sunday.

($1 = 73.6025 Indian rupees)

Reporting by Vibhuti Sharma in Bengaluru; Editing by Shounak Dasgupta

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