Earlier on today, it was reported that the Italian parliament signed off on government proposals to inject €20bn into the banking sector, with Monte dei Paschi likely to be first in line for some help.
Italy's oldest lender had desperately trying to drum up backers a rescue plan which would boost its capital by €5bn (£4.2bn).
However, various reports now suggest the bank is struggling to lock down key elements of the plan. In particular, Reuters reported the bank had hoped to secure a Qatari sovereign wealth fund as an anchor investor to commit €1bn in its cash call but had failed to do so.
It also recently came to light that Italian bailout fund Atlante was having second thoughts about a €1.5bn purchase of bad loans, another key part of the rescue plans.
And, this morning, updated paperwork published on the lender's website revealed it would likely burn through its cash on hand much quicker than previously thought. The approximately €11bn worth of liquidity it has to its name is now forecast to be used up in just four months, much quicker than the 11 months previously estimated.
Monte dei Paschi has until the end of the year to get its turnaround plan in order. It had applied to have this deadline extended to mid-January but the European Central Bank rejected this request.
Shares in the bank closed down 12.1 per cent at €16.30. However, earlier on in the day, shares were trading more than 17 per cent down compared to their previous close price, and were plummeting at such a pace they needed to be suspended.
Investors are unlikely to want to dig deep into their pockets at the moment, thanks to the highly uncertain political environment. The no vote in the Italian referendum at the start of the month lead to then-Prime Minister Matteo Renzi handing in his resignation.
However, Italy's government has vowed not to let the country's banking sector, which is creaking under billions of euros worth of soared loans, go under.