Nedungadi Bank To Raise Rs 20 Crore

The Calicut-based Nedungadi Bank Ltd (NBL), the oldest private sector bank in the country slated to celebrate its centenary in 1999, is planning to raise Rs 20 crore next month through seven-year privately placed debentures.

It will also go in for a Rs 30-crore public issue in the centenary year (1999), with a tentative premium of Rs 30 per share to take its capital to Rs 100 crore.

NBL chairman and managing director, A R Moorty said yesterday that with these steps, the bank proposes to double its growth by 1999 and register a further 100 per cent growth in the year 2001. Towards this end, NBL is planning new branches in the major metropolis including Delhi, Calcutta and Mumbai this year to give it an all India status and shed its otherwise conservatism and regional character.

 

In the wake of the competition with high-tech banks coming up in the private sector and the nationalised banks remaining what they were, NBL is now trying to make its presence felt nationally, taking advantage of its centenary celebrations.

The bank, whose deposits and advances stood at Rs 585 crore and Rs 369 crore respectively as on March 31, 1997 has set a growth target of 45 per cent this year of which 30 per cent will be achieved by September-end itself.

NBLs term deposit cost was higher by 1 per cent compared to nationalised banks. Interest rate on advances was higher.The average customer did not mind paying higher interest because he felt in Nedungadi, he received spot decisions and service with a smile." That is our strong point",he said.

The bank posted a net profit of Rs 4.30 crore in 1996-97 and has projected a net profit of Rs 12 crore this year.

He admitted of a 8.71 per cent non-performing assets but asserted that this will be brought down to less than four per cent by the year-end as per an action plan already put in motion. He did not agree that this was an impossible task, considering the clientele base of the NBL.