Lakshmi Vilas Bank plans to raise capital

A day after the Reserve Bank of India (RBI) rejected the amalgamation proposal of Indiabulls Housing Finance Ltd. and lndiabulls Commercial Credit Ltd. with private sector lender Lakshmi Vilas Bank (LVB), the latter said its immediate aim would be to raise capital.

“Our immediate focus will be to raise capital and bring down non-performing assets to the desired level,” said a top official of the bank. “At this juncture, we cannot give specific details as to when and how much money will be raised and from whom It would become a forward looking statement,” he added.

“Raising capital and reducing NPA would automatically bail us out of RBI’s Prompt Corrective Action (PCA),” he pointed out. On Thursday, it was work as usual at the corporate offices and branches of LVB. The shares of the bank lost 5% to close at ₹25.65 on the BSE.

The central bank’s decision brought to an end the five-month-long uncertainty relating to the amalgamation proposal. LVB would continue to work towards raising capital as per the permitted modes in compliance with all applicable acts and regulations, the bank said in a statement.

While assuring ‘best services’ to its existing clients, the 90-year-old bank said it enjoyed strong and a loyal client base with deposit book close to ₹26,000 crore.

Without referring to the present situation, the bank said it started its journey in 1926, witnessed lot of business cycles punctuated booms and recession and it continues to stand resilient and stronger as always.

For the second quarter ended June 2019, the bank reported a net loss of ₹237.25 crore against a loss of ₹123.86 crore a year ago.

The gross non-performing assets (NPA), as a percentage of gross advances, stood at 17.30% compared to 10.73% in the comparable year-ago period. Net NPAs grew to 8.30% from 5.96%.

A letter from the Editor

Dear reader,

We have been keeping you up-to-date with information on the developments in India and the world that have a bearing on our health and wellbeing, our lives and livelihoods, during these difficult times. To enable wide dissemination of news that is in public interest, we have increased the number of articles that can be read free, and extended free trial periods. However, we have a request for those who can afford to subscribe: please do. As we fight disinformation and misinformation, and keep apace with the happenings, we need to commit greater resources to news gathering operations. We promise to deliver quality journalism that stays away from vested interest and political propaganda.

Support Quality Journalism
Recommended for you
This article is closed for comments.
Please Email the Editor

Printable version | May 31, 2020 11:40:49 AM |

Next Story