Mumbai: Shares of Lakshmi Vilas Bank hit the 5 per cent lower circuit on Monday after the Reserve Bank of India (RBI) initiated Prompt Corrective Action (PCA) against it on account of its high non-performing assets (NPA) among other issues.
It hit the lower circuit right at the start of the trading session and fell 4.92 per cent lower to hit a 52-week low of Rs 34.75 per share. Trading in the stock has halted since it hit the lower circuit.
In a regulatory filing at the BSE, Lakshmi Vilas Bank on Saturday said: "The RBI has initiated PCA on account of high net NPA, insufficient capital to risk assets weighted ratio (CRAR, also known as capital adequacy ratio CAR) and common equity tier-1, negative return on assets for two consecutive years and high leverage."
The PCA comes after the RBI carried out an on-site inspection of the Bank on March 31 under Risk Based Supervision. According to the bank, the Reserve Bank has advised it on the restrictions imposed and the actions to be taken.
The Lakshmi Vilas Bank said it will report the monthly progress on the RBI directions.
"The PCA is aimed at improving the bank's performance and will not have any adverse impact on its normal day-to-day operations, including acceptance/repayment of deposits in the normal course," the bank said.
On September 27 too, the stock was stuck in the lower circuit of 5 per cent after its directors were booked in the loan fraud case.