DCB Bank to seek time to dilute promoters' stake

The regulator had asked the bank to bring down the stake from 18.5% before March 2014

DCB Bank Ltd (formerly known as Development Credit Bank) is planning to seek more time from the RBI to meet the norm that promoters’ stake should be below 10%, , said Murali M Natrajan, its MD and CEO, said. The RBI had asked the bank to bring down the stake from 18.5% before March 2014. The promoter, Akfed (Aga Khan Fund for Economic Development) and PJI (Platinum Jubilee Investment Ltd), holds 18.46% stake in the bank. The rest is held by other investors, including PE fund Tano Mauritius India FVCI II (4.76 %), WCP Holdings III (4.69 %), Ambit Corporate Finance Ltd (4.21 %), South Indian Bank (3.42 per cent), Tata Capital Financial Services (2.63 %) and TVS Shriram Growth Fund India (2.51 %).                    

Natrajan said, “It is impossible to meet the deadline at the current market conditions”.

In 2009, promoters' holding was around 26%, which was brought down gradually to 18.5%, he said.

“At the current market condition or in the next 12 months, it is not viable to take any move (diluting stake),” said Natrajan. On the bank's performance, he said the bank has set a target to double balance sheet from the current Rs 12,000 crore and to take total number of branches to 300 from the current 116 in the next two-three years.

The main focus will be beyond tier-II cities, where the wealth is created and life style is also getting changed. “Our target is 50-60% of the new branches should be beyond tier-II cities,” he said.