Dhanalakshmi Bank announces 5% dividend

Dhanalakshmi Bank Limited (DLB) has announced a 5 per cent dividend for its shareholders for 2005-06.

Speaking to the media here on Wednesday, V S R Murthy, executive director, DLB, said, "Actually we had planned 7 per cent dividend, but the Reserve Bank of India recommended only 5 per cent. However, for the year 2006-07, our dividend will be much more than this."

To raise its capital base, DLB would issue tier-II bonds during the next month with 9.75 per cent to 10 per cent interest. The bank will raise Rs 17 crore through bonds. The minimum investment will be Rs 10 lakh.

He said that the bank's current net worth was about Rs 147 crore. "But as per the RBI guidelines, we should increase it to Rs 300 crore by March 2009. So in future, we will also go in for public issue to raise the capital apart from bonds," he added

DLB is aiming at Rs 6,000 crore business (Rs 3,500 deposits and Rs 2,500 crore advances by the end of March 2007 as against its present total business of Rs 4,000 crore. Though the Rs 6,000-crore target is an ambitious one, we are confident of achieving it by branch expansion and deposit mobilisation.

The bank will open 32 new branches during this fiscal for which it has got licence from the RBI. Of the planned new branches, 13 will come up in Andhra Pradesh alone, according to Murthy. DLB, which has operations in 8 states, will open at least one branch each in all the states.

"We are announcing several incentives for the bank staff as well as our customers to raise our deposits, apart from offering higher interest rates with a view to reaching the Rs 6,000-crore business target," he said.

The bank has joined the Cash Tree ATM network to help its customers access 4,200 ATMs across the country.