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Canara Bank to provide Rs 259 cr for Canfina

Calcutta, Nov. 14: Canara Bank has decided to provide Rs 258.84 crore in the next four years in its books for its subsidiary Canfina that was involved in the 1992 securities scam.

Canfina incurred a net loss of Rs 48.23 crore for the financial year 2001-02, with accumulated losses of Rs 720.84 crore at the end of 2001-02. Its net worth has turned negative and was Rs 690.84 crore at the end of the last fiscal.

Canara Bank executive director N. Kantha Kumar said the bank has already provided Rs 477.76 crore for Canfina and another Rs 258.84 crore will be provided in the next four years.

The bank will take a final call on Canfina once the cases pending against the subsidiary are resolved. The bank has no plans to merge or close down any of eight subsidiaries at the moment. “They are yielding good business for us,” he said.

Canara Bank will also look at acquisitions for growth even as it is expecting recoveries of Rs 450 crore to Rs 500 crore of bad debts under the securitisation ordinance, a senior official said.

“We will welcome acquisition, provided it adds value as we have a handsome net worth of Rs 3,300 crore on a capital of only Rs 300 crore,” Kantha Kumar said.

About recovery of bad debts, Kumar said the bank had recently served notices on a trial basis under the securitisation ordinance to 100 defaulters for recovery of about Rs 450-500 crore. He said 35 per cent of defaulters who had been served notices had responded positively and recovery was expected soon.

“Depending on the response, we will decide whether to continue serving notices to defaulters in future. We will wait for clearance of the asset reconstruction company before aggressively pursuing the subject,” he said.

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