Shares of the Chennai-based private sector lender - Lakshmi Vilas Bank - were locked in a five per cent lower circuit on Thursday. Lakshmi Vilas Bank on Wednesday informed exchanges that its non-executive independent director Supriya Prakash Sen resigned from the bank. Resignation of the independent director comes after Lakshmi Vilas Bank was placed under the Reserve Bank of India's prompt corrective action (PCA) framework.

"I am writing to confirm that there is no other reason for my stepping down, just that I am unable to take up this formal and legal responsibility due to other personal priorities and commitments at this point in time," Ms Sen said in her resignation letter.

Meanwhile, Delhi Police has opened a probe into the directors of Lakshmi Vilas Bank after financial services company Religare Finvest (RFL) has accused Lakshmi Vilas of misappropriating Rs. 790 crore it kept with the bank as a fixed deposit. Lakshmi Vilas Bank has however said that the restrictions by RBI have no connection with the FIR registered by Religare Finvest.

Following the RBI's decision to place Lakshmi Vilas Bank, analysts say that its proposed merger with Indiabulls Housing Finance is stuck in limbo.

Lakshmi Vilas Bank shares ended 4.99 per cent lower at Rs 31.40 on the BSE and on the National Stock Exchange, Lakshmi Vilas Bank shares dropped 5 per cent to close at Rs 31.35. In the course of last four trading sessions, Lakshmi Vilas Bank shares have collapsed 18.33 per cent.