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ECONOMIC TIMES, KOLKATA
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29.02.08
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| Indian Bank unlikely to tap market before' 09 |
CHENNAI-BASED Indian Bank may not tap the equity market to raise
resources before 2009, Indian Bank chairman and managing director
MS Sundara Rajan said on Thursday.
According to the chairman, the bank will be adequately capitalised
even after factoring in the capital requirement under the imminent
Basel II regime. Indian Bank would need to adhere to Basel II
norms as of March 2008, as it has two overseas branches in Singapore
and Colombo. Banks without overseas branches would need to adhere
to the Basel II norms after a year on March 31, 2009.
“We may not look to raise funds from the equity market further
before 2009, as we are comfortable in the capital adequacy front.
We have a capital adequacy ratio (CAR) of around 13%. Of that
tier-I capital is very healthy at around 12%. So, we have enough
elbow room to raise resources by way of selling tier II bonds,”
Mr Sundara Rajan said.
Indian Bank had first hit the equity market in February last
year. Consequent upon this exercise, the government holding
in the bank came to 80%. He also indicated that a more than
required statutory liquidity ratio (SLR) holding can be leveraged
for funding the bank’s increasing credit business. Banks need
to hold a minimum 25% SLR, while the SLR portfolio of Indian
Bank, which stands at 34% is well above the prescribed norm.
In absolute terms, it has surplus government securities — which
qualified for SLR requirement — of around Rs 4,300 crore.
“We can sell the surplus SLR portfolio when required and fund
our credit expansion,” Mr Sundara Rajan said. The bank is growing
at a healthy pace. Its credit business is expected to grow 25%
in 2007-08 over Rs 29,000 crore of portfolio as on March 31,
2007. Its deposit collection is expected to grow 20% in this
fiscal over Rs 44,000 crore on March 31, 2007.
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