Leaving 93,000 shareholders stuck with worthless paper, stock exchanges have suspended the shares of Lakshmi Vilas Bank (LVB) following the RBI decision to merge the bank with DBS Bank on November 27.
The stock is likely to be delisted from the stock exchanges on Friday.
Shares of LVB had risen by 4.8 per cent to Rs 7.65 on Wednesday amid hopes that the RBI will announce some scheme to compensate shareholders. However, the final scheme announced on Wednesday didn’t offer any bailout for equity shareholders whose shares have been written off.
“The investors who bought in hope of revival, on an expectation of healthy gain got stuck. In this merger, shareholders of LVB will not get any benefit, The entire capital of the bank will be written off post the merger with DBS Bank India,” Jaikishan Parmar, Senior Equity Analyst, Angel Broking.
The Reserve Bank of India (RBI) said the moratorium imposed on Lakshmi Vilas Bank Ltd will be lifted on November 27, resulting in depositors being able to withdraw their funds without any limits.
“All the branches of the Lakshmi Vilas Bank will function as branches of DBS Bank India with effect from this date. Customers, including
depositors of LVB will be able to operate their accounts as customers of DBS Bank India with effect from November 27,” the central bank said.
📣 The Indian Express is now on Telegram. Click here to join our channel (@indianexpress) and stay updated with the latest headlines