Financial Daily from THE HINDU group of publications
Wednesday, Apr 07, 2004
Financial Daily from THE HINDU group of publications Wednesday, Apr 07, 2004 |
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Money & Banking
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Private Banks Subscribed capital norm — Centurion Bank gets time till Dec 31 Our Bureau
Mumbai , April 6 CENTURION Bank has received exemption till December 31, 2004 from the Finance Ministry and the Reserve Bankof India on meeting the minimum requirements of subscribed capital in proportion to the authorised capital as prescribed by the Banking Regulation Act. Meanwhile, the bank has incurred a net loss of Rs 26.33 crore for the over 10-month period ended February 2004, according to the draft prospectus field with the Securites and Exchange Board of India for the proposed rights issue of Rs 90.80 crore. The bank has not yet received approval from RBI for the appointment of Mr Rana Talwar as its Chairman. The bank will have to comply with the regulations by December 31. Failure to do so may require it to either reduce its authorised share capital or seek further extension of time for compliance, or comply by issuance of fresh capital. "With the infusion of capital under the (restructuring) scheme, we expect to improve our business prospects in future and thereby turnaround our performance,'' said the prospectus. The bank's net NPAs as on February 6, were Rs 130.83 crore representing 8.35 per cent of net customer assets, as compared with Rs 104.09 crore representing 7.51 per cent of net customer assets at year-end fiscal 2003. While the bank claims to have already made provisioning with respect to most of its corporate loans in excess of the regulatory standards, "... we may decide to make further accelerated provisioning on a prudential basis,'' said the document. The capital adequacy ratio as on February 6, 2004 was at 8.08 per cent with 9 per cent being the regulatory norm. Upon completion of the rights issue, the bank expects to meet the prescribed norm. The bank's previous rights issues in February 2001 were not adequately subscribed.
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