DCB Bank seeks more time from RBI on equity dilution

Private sector DCB Bank today said it has sought extension of deadline from the Reserve Bank to dilute promoter stake to 10 per cent, citing prevailing poor market conditions.
The RBI has set a March 2014 deadline for the DCB promoter Aga Khan Fund (Aga Khan Fund for Economic Development or Akfed), which holds 18 per cent in the city-based mid-sized bank, and another Fund-related entity Platinum Jubilee Investments (holding 1 per cent), to dilute stake.
"We have sought the RBI's guidance on the issue (bringing down the stake) and also extension (of deadline) to comply with their directive," DCB Bank Managing Director and Chief Executive Murali M Natrajan told PTI here.

He was in the city to inaugurate an art exhibition.
Natrajan said Akfed has over the past few years brought down its stake from 26 per cent to 18 per cent now.
DCB Bank (formerly Development Credit Bank) was set up in 1930 and converted into a scheduled bank in May 1995.

The bank offers services related to retail, SMEs, mid- corporate, agriculture and commodities. It has close to 4.5 lakh customers across 16 states and two Union Territories through 115 branches.
Natrajan said the bank aims to have a total business (deposits and advances) of around Rs 24,000 crore in the next three years. In FY'13, its business was about Rs 12,000 crore.

He said the bank plans to open 300 branches in the next 2-3 years across the country. "Having a sizeable presence in northern and Western parts of the country, we want to increase our presence in southern and north eastern parts, for which a strategy will be chalked out."
New branches will come up in Tamil Nadu, Gujarat, Maharashtra, Andhra Pradesh and Odisha. Of the 300 new branches, more than half of them will be in Tier II and small cities, and rural areas, the Chief Executive said.
"Branches located in smaller cities and villages break-even in just 18 months," he said.

He said the bank will focus on retail and small and medium scale industries.