Apex lender Reserve Bank of India (RBI) has imposed monetary penalty worth Rs 1 cr on Lakshmi Vilas Bank and Rs 75 lakh on Syndicate Bank, post which the share price of both the lenders fell 5% each to hit their 52-week lows on the bourses today.
RBI on October 14, 2019, has imposed a penalty of Rs 1 crore on Lakshmi Vilas Bank for non-adherence to guidelines on IRAC norms and divergence in respect of two NPA accounts aggregating to Rs. 169.50 cr for the financial year ended March 31, 2017.
Similarly, the apex bank also penalised Syndicate Bank worth Rs 75 1akh on account of delay in reporting the fraud to RBI and upfront disbursal of housing loans in cases of incomplete/ under-construction /green field housing projects.
Following the news, the share price of Lakshmi Vilas Bank fell 4.96% intraday to Rs 22.05, while Syndicate Bank shares plunged 6.3% to the day' slow of Rs 23 on the BSE counter.
LVB, as well as Syndicate bank shares, are currently trading at their 52-week lows, that is also their 5-year lows.
The share value for both lenders has diminished subsequently over the years. Since inception, LVB shares hovered around Rs 22 share-value in June 2006 and Syndicate Bank shares valued Rs 23 last in June 2003.
In year-to-date perspective, shares of LVB and Syndicate bank have eroded 77% and 38% value, respectively.
By Rupa Burman Roy