Lakshmi Vilas Bank shares sink 20 per cent as RBI imposes moratorium

The key Indian equity indices traded on a flat note on Wednesday morning with weak global cues.

At 9.38 a.m., Sensex was trading at 43,912.94, lower by 39.77 points or 0.09 per cent from its previous close of 43,952.71 points.

It opened at 43,978.58 and has so far touched an intra-day high of 44,051.66 and a low of 43,816.15 points.

The Nifty50 on the National Stock Exchange was trading at 12,865.65, lower by 8.55 points or 0.07 per cent from its previous close.

Shares of Lakshmi Vilas Bank plunged 20 per cent on Wednesday after the Centre placed it under moratorium.

Following an application submitted by the Reserve Bank of India (RBI), the Central government on Tuesday brought Lakshmi Vilas Bank under moratorium for 30 days, and restricted withdrawals  by depositors to Rs 25,000 each.

The Centre issued the moratorium notification under Section 45 (2) of the Banking Regulation Act, 1949. The moratorium came into effect from 6 p.m. on Tuesday and will be in place up to December  16, 2020.

The notification also stays the commencement or continuance of all actions and proceedings against Lakshmi Vilas Bank.

Currently, its shares on the BSE are trading at Rs 12.40, lower by Rs 3.10 or 20 per cent from its previous close.