Tayals Want To Tighten Reins, Up Stake To 40%

The promoters of Bank of Rajasthan Ltd (BoR), led by Pravin Kumar Tayal, are planning to increase their stake in the bank by 2 per cent to 40 per cent via creeping acquisition.

"Our stake in BoR stands at 38 per cent. With the scrip currently ruling low, we will have no problem in increasing our stake to 40 per cent, the maximum limit a promoter is allowed to hold in a private sector bank by the Reserve Bank of India," chairman P K Tayal told reporters here.

Domestic companies hold 25.80 per cent stake in the Rs 107.59 crore paid-up capital of BoR. Resident individuals have a 35.81 per cent stake, while mutual funds, banks and financial institutions together account for 0.43 per cent stake.

 

The bank has also set an ambitious target of attaining a net worth of Rs 500 crore and putting a branch network of 500 across the country in place in three years. The bank's net worth as on March 31, 2001 stood at Rs 178 crore against Rs 109 crore as on March 31, 2000 and the branch network stands at 309 branches.

"The bank is close to finalising alliances with a life insurer and a general insurance company for distributing their products. The aim behind increasing the net worth to Rs 500 crore is to enable us to go it alone in the insurance business," Tayal said.

BoR has set a net profit target of Rs 80 crore to be achieved in 2001-02 against Rs 32.22 crore posted in last fiscal and it intends attaining a capital adequacy ratio (CAR) of 14.5 per cent as on March 31, 2002 against 10.57 per cent as on March 31, 2001, K M Bhattacharya, managing director and CEO said.

In the first quarter ended June 30, 2001 the bank reported a net profit of Rs 12.60 crore and the CAR stood at 11.5 per cent as on that date.

On the non-performing assets recovery front, the bank has set a recovery target of Rs 80 crore in 2001-02. Of the gross NPAs of Rs 361 crore, Rs 97.67 crore is accounted for by 20 large accounts of sick units. It has made a cash provision of Rs 221 crore towards the gross NPAs.

The gross and net NPAs stood at 17 per cent and 7.65 per cent respectively as on March 31, 2001.

The Bangurs, former promoters of BoR, who still hold around 2 per cent stake in the bank, owe the bank Rs 200 crore (principal and interest), Tayal said. Bhattacharya pointed out that operations of BoR's loss making non-banking finance subsidiary, the Rajasthan Bank Financial Services Ltd (RBFSL), was in a suspended state of animation and has decree to recover outstanding loans amounting to around Rs 5 crore. RBFSL, which has a paid-up capital of Rs 5 crore has reported a higher net loss of Rs 13.86 lakhs in 2000-01 as against Rs 7.43 lakhs in the previous fiscal.