The Hindu Business Line : Dena Bank to raise Rs 300 cr tier-II capital

In the second round, it is likely to raise tier-I capital of Rs 125 crore through perpetual debt and lower tier-II capital of Rs 250 crore through subordinated bonds

MR P.L. GAIROLA (right), Chairman & Managing Director, Dena Bank, and Dr B.R. Shetty, Managing Director & CEO, UAE Exchange, at a press conference in Mumbai on Saturday. — Shashi Ashiwal

Mumbai , Sept. 16

Dena Bank is planning to raise Rs 250-300 crore upper tier-II capital through a domestic bond issue in the next two months. This is part of the bank's plan to raise a total of Rs 675 crore this fiscal, said Mr P.L. Gairola, Chairman and Managing Director.

In the second round, it is likely to raise tier-I capital of Rs 125 crore through perpetual debt and lower tier-II capital of Rs 250 crore through subordinated bonds, said a senior official of the bank.

The bank has recently tied up with Wipro Technologies Ltd for its core banking solution to be put in place across 10 branches in the next three months.

More branches

"We will add more branches by March while setting up data centres and a disaster recovery site to be located either at Bangalore or Hyderabad," said Mr Gairola.

The bank is planning to reduce its net NPAs to 1.5 per cent by March 2007 from 3.25 per cent as on June 30, 2006.

It has identified Rs 600-crore worth NPAs for a sell-off, Mr Gairola said.

`PwC is consultant'

"We will not sell the NPAs at one shot. PricewaterhouseCoopers is the consultant," he added.

In tandem the bank is targeting a total recovery of Rs 350 crore this year, the Chairman said.

He was speaking to press persons on the sidelines of a meeting to announce the tie-up with UAE Exchange Centre, LLC, for inward rupee remittances.

Under this tie-up, NRIs in the Gulf can remit funds to India through rupee drafts drawn by UAE Exchange on 200 designated branches of Dena Bank across India. The drafts can be drawn in favour of individuals, or institutions like LIC or UTI for payment of insurance premium or investment in units.

They can also be made out to co-operative housing societies, Government housing schemes, real estate developers for buying property and postmasters for placing funds in postal savings schemes.

NRIs can also send drafts to schools and colleges for payment of fees, to hotels and travel agents for booking and to hospitals.