Business Daily from THE HINDU group of publications
Friday, Jun 13, 2008
ePaper | Mobile/PDA Version | Audio
Business Daily from THE HINDU group of publications Friday, Jun 13, 2008 ePaper | Mobile/PDA Version | Audio |
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Money & Banking
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Public Sector Banks Canara Bank to seek shareholders’ nod to raise capital K.R. Srivats New Delhi, June 12 Canara Bank will seek shareholders’ nod on June 18 to raise capital to fund its expansion plans and business growth. The bank will go for an enabling resolution at its forthcoming general body meeting to give adequate flexibility and discretion to the board to finalise the capital raising plans, sources said. The bank is looking at various options for raising capital, including qualified institutional placements (QIPs) with qualified institutional buyers (QIBs). Even after the proposed capital raising, the Union Government’s stake would not come below 51 per cent. Currently, the Centre has 73.17 per cent stake in the bank. In fact, Canara Bank had at the last annual general body meeting obtained shareholders’ nod for raising capital under various options, including QIP. The SEBI guidelines restrict the validity of such resolutions to one year for QIPs. Since the bank had not made the issue last year, the approval of shareholders is being sought again. The capital adequacy ratio as on March 31, 2008, stood at 13.25 per cent, above the 9 per cent stipulated by the Reserve Bank of India. The paid-up capital stood at Rs 410 crore. In 2007-08, the bank raised Tier-II bonds worth Rs 700 crore to augment capital base. In November 2002, Canara Bank had through an initial public offering (IPO) raised Rs 385 crore by the issue of 11 crore equity shares of Rs 10 each at a premium of Rs 25 a share. This capital raising effort was to augment long-term resources and maintain capital adequacy ratio of around 12 per cent. More Stories on : Public Sector Banks
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