| Gujral in Calcutta on Tuesday. Picture by Kishor Roy Chowdhury
Calcutta, May 13: Punjab & Sind Bank is planning a Rs 100-crore initial public offer (IPO) this fiscal to fund its business expansion plans.
. S. Gujral, chairman and managing director of the bank, said: “We have to increase our capital in the current fiscal. If the Reserve Bank allows us to increase our Tier-I capital then we will go for an IPO. Otherwise we will raise our Tier-II capital by issuing sub-ordinate bonds.”
The bank had been hauled up by the RBI in 2002 for not providing for Rs 221 crore in its accounts.
Gujral said the RBI’s inspection report showed a shortfall of Rs 221 crore in provisioning. Moreover, the apex bank also brought down the capital adequacy ratio of the bank to 5.27 per cent.
He said that the bank has already provided the amount and is expecting a Rs 32-crore profit for the year ended March 31, 2003. “The results are unaudited till now. But if we earn a net profit of Rs 1 crore for 2003-03, the bank will be able to achieve a CAR of 9.6 per cent. We expect to reach a three-digit profit figure in the current fiscal,” he added.
The bank made a recovery of Rs 187 crore in 2002-03, out of which Rs 117 crore was cash recovery. The bank expects to make Rs 250-crore in the current fiscal. The net non-performing asset of the bank is 10 per cent of the total advances.
The bank has garnered business worth Rs 20,000 crore in the last fiscal, out of which Rs 13,500 crore were deposits and Rs 6,500 crore were advances.
Gujral said the bank has kept a target of 18 per cent growth in deposits and a 15 per cent growth in advances in 2003-04.
The bank plans to improve credit offtake in the northeast as also at 28 branches and 10 extension counters spread over four states of West Bengal, Orissa, Bihar and Jharkhand, he added.