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| Central Bank evaluating options to raise capital |
| Press Trust of India / Mumbai May 31, 2009, 15:41 IST |
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State-run Central Bank of India is assessing various options to raise capital, which could include a rights issue, a top bank official said.
"We are discussing various options to augment our capital base. Rights issue could be one of those options. But there are no proposals at present," Central Bank of India Chairman and Managing Director S Sridhar told PTI here.
The government currently owns around 80 per cent stake in the bank. Apart from rights issue, the bank is understood to be weighing the option of a follow-on-public issue.
Central Bank had received Rs 700-crore capital from the government last fiscal, out of the total capital infusion programme of Rs 1,400-crore, Sridhar said.
The bank is likely to avail the remaining Rs 700-crore by the second quarter of this fiscal, which it will utilise to strengthen its loan book.
Central Bank has targeted 20 per cent growth in its infrastructure lending this fiscal as against a 15 per cent growth rate achieved in the last fiscal, Sridhar said.
"Infrastructure financing clearly is a focus area of Central Bank. We expect a 20 per cent growth rate in infrastructure loans this fiscal," Sridhar said.
The bank is planning to launch an infrastructure fund after strengthening its capital base, Sridhar said.
"Though we do not have any immediate plans to launch the infrastructure fund, we would definitely look at this at a later stage," Sridhar said.
There is a strong need to develop the corporate bond market in the country to meet the funding needs of Indian companies, he said.
Also, efforts should be made to enhance the participation of banks in equity markets, Sridhar said.
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