The Hindu Business Line : Catholic Syrian keen to retain identity

DISCOUNTING all rumours of acquisitions, mergers and divesting stake to non resident Indians, Catholic Syrian Bank has said that it is exploring various other options to increase its capital base.

"We are seriously pursuing various other avenues such as going in for an initial public offer of equity shares, rights issue and increasing the Tier II capital, in order to shore up our capital base," Mr N.R. Achan, Chairman of the bank, told Business Line.

The bank has ruled out mergers and acquisitions since it is keen to keep its individual identity, strengthen its deep roots with its place of origin, Thrissur, as well as to maintain the faith and trust of its original promoters, stakeholders and its employees.

This was one of the prime concerns expressed when the Bangkok-based NRI, Mr Surchan Chansri Chawla, bought 36 per cent stake in the bank, way back in the early nineties.

The bank, which has a capital base of Rs 185 crore currently, has to increase it to Rs 300 crore, as per the RBI guidelines. The guidelines also stipulate that no individual shareholder or group can have a stake of more than 10 per cent in the bank.

The Chawla Group had acquired 19.6 lakh shares in the bank, constituting 36 per cent of the paid-up capital at a price of Rs 85 per share in the early nineties. This acquisition was reduced to 18 per cent, when the bank undertook a rights issue in 1999. The bank planned to reduce individual and group holdings in its equity base, progressively.

"After the IPO and rights issue, we will be able to bring down the individual and group holding in the bank to the stipulated 10 per cent of or less," senior sources in the bank said.

With a small paid-up capital base of Rs 10.67 crore, the sources said that the bank had tremendous scope for expanding its capital base through public and rights issues.

The bank was also able to record a net profit Rs 10.65 crore as on March 2005.

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