Mahabank to raise Rs 650 crore

Bank of Maharashtra is planning to raise Rs 650 crore in the current financial year through upper and lower tier-II bonds to meet its growth requirements, Rajiv Madhok, executive director, said.

"We would be raising funds to meet the growth needs of our balance sheet," Madhok said.

"Depending on the market conditions, we would raise about 6.5 bln rupees of upper tier-II and (lower) tier-II capital in the current financial year."

The upper tier-II bonds will be issued in July-September, and subsequently go for lower tier-II issues, he said.

At present, the Pune-based bank's capital adequacy ratio is around 12 per cent. "Raising upper tier-II bonds first will give us more headroom for lower tier-II bonds," Madhok reasoned.

The state-run bank aims to grow its credit 28 per cent and deposit 23 per cent in the current financial year, he said. As of March 31, 2007, the bank's advances stood at Rs 234 billion, while deposits were at Rs 340 billion. Shares of Bank of Maharashtra ended at Rs 50 rupees on the National Stock Exchange, down 0.1 per cent from Tuesday.