Dena Bank plans to raise Rs 80 crore via public issue

To double retail finance in the current financial year

Dena Bank aims to double its retail loans in the current fiscal, from the present level of Rs 700 crore to Rs 1,430 crore by March, 2005. For this, the bank has chalked out different strategies including the opening of over 50 Retail Finmarts for disbursement of retail loans.

The bank also plans to raise an additional capital of Rs 80 crore through its second public issue and has already approached Ministry of Finance and the Reserve Bank of India for clearance.

"The capital adequacy ratio, as on 31 March,2004, was 9.48 per cent compared with 9 per cent prescribed by the Reserve Bank of India (RBI). With the second public issue of Rs 80 crore, we plan to improve the capital adequacy ratio to a comfortable level of about 12 per cent by March, 2005," Anil K Khandelwal, chairman and managing director, Dena Bank told Business Standard.

The bank aims a growth of 20 per cent in the current fiscal.

The bank plans to have referral arrangement with a public sector insurance company for selling the non-life insurance products through the bank's branches. Dena Bank expects to earn fee and commission on the insurance policies sold through all its 1,135 branches across the country.

However, the bank has no plans to takeover any other smaller banks. The priority sector advances constitute 44.64 per cent of the bank's net credit compared with the prescribed limit of 40 per cent. The agricultural advances constituted 18.52 per cent of the net bank credit.

While talking about the rural sector, Khandelwal said, "The bank has issued over 61,000 Dena Kissan Credit Cards (DKCC) as on March, 2004 with aggregate outstanding amount of Rs 226.20 crore. The bank has also introduced personal accident insurance cover for DKCC beneficieries with the premium to be shared by the bank and the beneficiary in the ratio of 2:1. All eligible borrowers have been covered by the bank under DKCC scheme as on March 31, 2004."

The Bank has entered into a tie up with Eicher Tractors Ltd, for farm mechanisation, under which the farmers will get a discount of Rs 5,000 for purchasing Eicher Tractors. This will help the bank increase its advances to agricultural sector.

In the current fiscal, the Bank plans to open about around 15 branches at various potential centers across the country. The bank plans to computerise all its 1,135 branches by March, 2005.

It is planning to increase the number of ATMs from 101 to 200 by March, 2005.

The bank also plans to introduce mobile banking and Internet banking facility at 100 branches.

The bank proposes to introduce centralised core banking system project in the FY05.