Central Bank to raise Rs 700 cr tier-II capital

Central Bank of India (CBI) proposes to raise Rs 700 crore tier-II capital by December this year. The bank had raised tier-II capital of Rs 100 crore last March.

CBI Chairperson and Managing Director Homai Ardeshir Daruwalla said that the bank required to raise the tier-II capital to meet its capital requirement.

Its capital adequacy ratio as of March 2006 stood at 11.03 per cent. She added that CBI was awaiting amendment to the Banking Regulation Act to help float its maiden public offering.

Meanwhile, CBI has approached the Reserve Bank of India (RBI), seeking permission for opening its representative offices in Dubai, Singapore and Hong Kong. "We also want to establish a branch in London, but it will take time," Daruwalla said.

For the first time this year, she said, the bank had posted positive results in the first quarter. CBI posted a net profit of Rs 98 crore during the quarter ended June 2006 as against a loss in the corresponding quarter in the previous year.

The bank has targeted a 25 per cent growth in business mix . It is aiming at a turnover of Rs 1,27,000 crore and a net profit of Rs 650 crore this year against last year's figures of Rs 1,05,678 crore and Rs 257 crore respectively. As on July 28, 2006, the bank's business stood at Rs 1,08,507 crore.

CBI would be adding 247 branches to its existing 3,129 branches besides opening 320 more ATMs in 2006-07. It proposes to bring 700 branches under the umbrella of core banking services.

Apart from offering 12-hour banking facility in many branches, the bank would also be extending demat services to at least 50 branches in major centres through WAN connectivity.

CBI, which has recently entered into a memorandum of understanding with UTI Asset Management Company for distributing the latter's products, is looking towards similar tie-ups with various mutual funds.