The Hindu Business Line : Canara Bank to seek more powers for board

New Delhi, July 13 Canara Bank will seek shareholders’ nod at the forthcoming Annual General Meeting on July 26 to give adequate flexibility and discretion to the board of directors to raise further capital to meet its expansion plans, implement Basel-II norms and thereby further strengthen its capital adequacy.

Banking industry sources said the enabling resolution would help the board decide on the type of securities (equity shares/preference shares/debt) to be offered by way of public issue/rights issue/preferential issue and/or on a private placement basis.

Preference shares

Indications are that the bank may go in for issuance of preference shares in the coming days once suitable legal framework is in place.

Plans are afoot to also empower the board to undertake a qualified institutional placement with qualified institutional buyers as specified in SEBI guidelines.

In fiscal 2006-07, Canara Bank raised lower/upper Tier-II capital of Rs 1,975 crore from domestic market and $250 million overseas by way of medium term note programme.

As on March 31, 2007, the capital-to-risk-weighted assets ratio of the bank stood at 13.5 per cent vis-À-vis 9 per cent benchmark.

Securities issue

Sources said that shareholders’ nod was being sought to enable the board to issue securities without having to offer them on a pro-rata basis to existing shareholders.

The listing agreement with stock exchanges requires Canara Bank to offer securities on a pro-rata basis to existing shareholders unless the shareholders in general meeting decide otherwise.