Canara Bank's plans to raise capital through an initial public offering in September this year has come unstuck with the government yet to approve the bank's application to return part of its capital to the government.
"The bank had plans to hit the capital market with an IPO by September. Before that, we wanted to return part of Rs 578 crore capital base to the government, for which we approached the Centre a month ago", the bank's chairman R V Shastri said at the launch of a scheme by subsidiary Canbank Mutual Fund.
The bank was planning an IPO of Rs 110 crore. After returning the capital, the equity would stand at Rs 300 crore and the bank was to issue fresh equity at a premium, Shastri said adding that the timing of the issue would be decided later.
On the steps to recover bad assets from defaulters under the new securities enforcement ordinance, he said the bank has issued about 10 notices to defaulters involving assets of over Rs 100 crore.
Once the ordinance is repromulgated, "we will step up the recovery process," Shastri said adding "the bank made cash recovery of Rs 80 crore from non-performing assets in the last fiscal, boosting its profit after tax to Rs 741 crore."
The bank was in the process of setting up a cell for seizure and train concerned staff in recovery process. The bank, at a later date, "may outsource" part of the recovery work, he said.
Shastri said its proposal for the banking joint venture with the State Bank of India in Russia was still pending with the banking regulators of that country.
The bank was planning to become a financial supermarket by the end of 2003-04 and would exploit synergy among its subsidiaries, including Canbank Mutual Fund.
The bank would start marketing of Canbank MF products shortly and more than double its investors base from the current 2 lakh unitholders, he said.
