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Central Bank seeks nod for capital restructuringTuesday 20, June, 2006 Central Bank of India has sought the Government's approval for its plan to treat a portion of its capital as preference capital, a precursor to a proposal to list its stock on the bourses.Central Bank , which has a capital base of over Rs 1,000 crore, intends to allow retail and institutional shareholders to hold a critical part of its equity. The bank, which has started discussions with the Government on the proposed restructuring, is at present constrained by certain regulations insofar as the recast is concerned, indicated Ms H.A. Daruwalla, CMD, adding that the bank has not ascertained the extent to which it will offload its shares. "Our existing capital base will have to be treated differently. This is important for taking our plans forward," she told newspersons here on Monday after addressing a meeting organised by FICCI. The bank has lately seen a decline in capital adequacy ratio, which currently stands at about 11 per cent. The drop has been attributed partly to an increase in risk weighted assets. The bank, which has recorded a business of about Rs 1,05,000 crore as on March 31, 2006 (an increase of 17.6 per cent), hopes to augment its profitability this year, partly through an increase in fee-based income. It is targeting a 30 per cent growth in credit and a 20 per cent increase in deposit. Incidentally, while its advances grew by 34 per cent or so last year, the growth in the bank's deposit base has not kept pace and has grown only by about 9.4 per cent. However, the bank will not go in for high-cost deposits, Ms Daruwalla said. On another front, the bank wants to beef up its credit cards business, which is at the moment constrained by a relatively small customer base. The bank, which traces its roots to the early 1900s, is among the first Indian entities to have a credit cards business, it is pointed out. |
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