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Mangalore, June 5 Karnataka Bank Ltd is planning to issue equity shares on rights basis. The bank has informed the BSE that a meeting of the board of directors will be held on June 12 to consider the proposal for issue of equity shares on rights basis and/or other means.

Asked about the reasons for this proposal, Mr Ananthakrishna, Chairman and Chief Executive Officer of the bank, told Business Line: “We have assessed the capital requirement of the bank. So we thought that we may have to raise the capital this year for business growth. In this regard, we are keeping ready the enabling clauses for this.”

To a query on the amount to be raised through this offer, he said it is yet to be decided.

When asked about the offer price and the ratio of shares, Mr Ananthakrishna said all these issues will be decided in June 12 meeting. The meeting may also discuss other modes of raising funds.

It may be mentioned here that the bank came up with a rights issue in early 2005 at the offer price of Rs 20 per share. Then the bank had offered two shares for one held. The bank wanted to increase its equity base to Rs 120 crore from Rs 40 crore with that issue.

More Stories on : Private Banks | Rights Issue

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