Shareholders Vote Out Existing Administration, Lakshmi Vilas Bank Stock Drops by 6%


Shareholders Vote Out Existing Administration, Lakshmi Vilas Bank Stock Drops by 6%
The Lakshmi Vilas Bank (LVB) shares have dropped by six percent to 18.10 on the BSE in intraday trade. This occurred after the major section of shareholders of ailing private sector lender voted against the reappointment of the managing director and chief executive, in addition to seven directors and auditors at the recent annual general meeting (AGM).
Although, the stock revived from its early morning loss by 0.52 percent and is been trading at 19.05 on the BSE. The stock is been compared with S&P BSE was at 0.76 percent at 37,671 points. 
LVB announced in a press release, "With Liquidity Coverage Ratio (LCR) of about 262 percent as on 27th September 2020, against minimum 100 percent required by RBI, the deposit-holders, bond-holders, account-holders, and creditors are well safeguarded.” 
However, a part of LVB's shareholders who are not happy with the measures the bank is taking along with its sharp deterioration in finances, have voted for the appointment or re-appointment of seven directors that even includes MD & CEO, S Sundar and auditors during the bank's AGM held on September 25, 2020. LVB is also involved in talks with Clix Capital to collaborate with the intension to raise capital. 
On September 27, the Reserve Bank of India (RBI) has permitted a Committee of Directors (CoD), comprising of three independent directors, who would run the day-to-day affairs of the lender.
In a media release, the bank has stated that it would proceed to enforce cost reduction measures both direct and indirect costs. However, the bank's provision coverage ratio is still healthy at 72.6 percent, against the minimum of 70.0 percent prescribed under PCA. Alongside this, the existing business, the bank would continue to concentrate on capital-light loans.