Canara Bank to raise over Rs 500 cr via QIP

The bank aims to keep its CAR at 10%; CAR was at 9.8% as of December 31, 2013

Bangalore-based public sector lender Canara Bank, which has been on a fund-raising spree during the calendar year, will now raise Rs 500 crore or more, depending on needs.

The bank’s plan to raise Rs 500 crore through a Qualified Institutional Placement (QIP) came hardly a month after it declared it planned to raise Rs 1,000 crore via bonds to fund its business growth. The bank had on Monday announced it would consider raising funds through the qualified institutional placement (QIP) route or through preferential allotment during the current financial year.

The bank’s board had also constituted a committee of directors to work on the modalities of the two options.

In January, the bank had also raised Rs 1,500 crore from bonds to enhance its capital base.

The bank is aiming to keep its Capital Adequacy Ratio (CAR) at 10 per cent, and for this it has had to raise the funds. CAR stood at 9.8 per cent as of December 31, 2013.

Meanwhile, a senior bank official said the process of absorption of the Bangalore-based Amanath Co-operative Bank into its fold was well on the way. The official added that the matter was in the courts now. It has received the proposals for the same from the Centre and bank’s board. It has also received approvals from the state government. He said the bank was awaiting the approvals from the Reserve Bank of India.