Lakshmi Vilas Bank jumps 10 per cent intraday, locks in at upper circuit-Find out why

On Wednesday, the shares of Lakshmi Vilas Bank (LVB) gained by around 10 per cent intraday and locked in at its upper circuit of 5 per cent at Rs 7.65 per share during the afternoon trading session.

The shares of LVB were declining since RBI had put it under moratorium and also capped withdrawals at Rs 25,000. Continuing this declining momentum, the shares of the bank had fallen by 5 per cent in today morning’s trading session and eventually, locked in at its lower circuit.

Reacting to the market reports suggesting that the Cabinet has approved LVB’s merger with DBS India, the shares of the bank reversed today morning’s losses and gained by around 10 per cent.

According to a draft merger scheme by RBI, DBS is expected to invest around Rs 2,500 crore regulatory capital of LVB. Further to this, the entire paid-up share capital of the bank will be written off upon merger. For a successful merger, RBI expects this process to be completed by December 16.