The Hindu Business Line : Canara Bank plans to raise Rs 400-crore Tier II capital

CANARA Bank plans to raise Rs 300 crore to Rs 400 crore through the tier II capital route to fund some of its business plans and increase its capital adequacy ratio to 13.93 per cent from the current 12.66 per cent.The bank hopes to finalise before March-end, said Mr V.P. Shetty, Chairman and Managing Director.

Talking to reporters here on Saturday after opening an ATM centre at Yediyur in southern Bangalore, Mr Shetty said though the bank's CAR (capital adequacy ratio) was adequate to meet its current requirement, it was tapping tier II capital as a preparation to meet the dynamic market requirements.

With recent changes in interest rates where banks raised both term lending and deposit rates, Canara Bank will also focus its attention on the retail lending market where it has a considerable market leadership. However, Mr Shetty did not see any change in the spread the bank could gain from its current 2.89 per cent. If at all, there could be some marginal increase, and, that too, with the interest regime stabilising at a steady level.

The bank recently introduced some products such as `Cantravel' for encouraging tourism and `Canbudget' to encourage retail lending.

With the market maturing, Mr Shetty said the bank would like to categorise the segments to focus vigorously to tap the growing demand. He expects the bank's retail lending to expand to Rs 13,000 crore by the end of the current fiscal against the current level of Rs 9,000 crore. The overall business by the current fiscal is expected to reach Rs 1,55,000 crore (both advances and deposits), against Rs 1,34,000 crore during 2003-04.

Canara Bank also plans to distribute general insurance products. A decision on the tie-up with the insurance company will be announced by next week, he said, adding that the bank had a tie-up with Aviva for life insurance products.

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
What kind of a central banker do we need?

ICRA assists Bulgarian rating agency

Hawkish Fed minutes, euro selloff — Bond markets are extremely cautious

Life insurers' buying supports bonds

PSU bankers urged to move out of `comfort zone'

Canara Bank plans to raise Rs 400-crore Tier II capital

Two IOB branches in Thiruvananthapuram to work on Sundays

AP wants ICC complex to be completed by year-end