Citing unfavourable market conditions, mid-size private lender DCB Bank has said it will seek more time from the Reserve Bank to bring down the promoters' stake to under 10 per cent.
The regulator had set a March 2014 deadline for the DCB promoters, Aga Khan Fund (Aga Khan Fund for Economic Development or Akfed), which holds 18 per cent in the city -based bank, and another Fund-related entity Platinum Jubilee Investments holding another 1 per cent.
The rest of stake in the lender (formerly Development Credit Bank) is with public, institutions and foreign investors. Akfed is a global enterprise dedicated to promoting entrepreneurship and building economically-sound companies.
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The DCB board is headed by Nasser Munjee as Chairman.
"We will have to seek the advice of the Reserve Bank on the future course as we will not be in a position to dilute the stake now, as the market is not conducive now," DCB Bank Managing Director and CEO Murali M Natrajan told PTI.
The DCB shares recently traded almost near their 52- week high of Rs 60.55 on the BSE. Last Friday, the shares closed at Rs 56.75, down 3.73 per cent.
Natrajan pointed out the Fund has over the past few years brought down stake from 26 per cent to 18 per cent now.
Set up in 1930s, DCB was converted into a scheduled bank in May 1995 and today it offers services related d to retail, SMEs, mid-corporate, agriculture and commodities. It deals with close to 4,50,000 customers across 15 states and two Union Territories through 115 branches.
Earlier this week, the bank had reported a 33 per cent rise in net profit at Rs 36 crore in the three months to December, up from Rs 27 crore a year ago.
Capital adequacy ratio stood 12.86 per cent under Basel III as of end December, Natrajan said, adding during Q3 the balancesheet rose 24 per cent to Rs 11,989 crore.
Natrajan said the bank added 12 new branches in the December quarter to 115, and is hopeful of adding 15 more by March-end. Most of these will come up in Chhattisgrah, MP, Andhra Pradesh, Gujarat, Punjab and Rajasthan.
