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Global Trust set to go full throttle on foreign capital

Mumbai, Sept. 23: Global Trust Bank (GTB) has decided to inject fresh capital to the tune of 49 per cent of its equity through foreign direct investment (FDI) in an attempt to shore up its capital adequacy ratio.

The board has approved the proposal under which foreign investors will hold 49 per cent of the equity, the maximum they are allowed to own in a private sector bank, managing director Sudhakar Gande said today.

The move will steer the bank back towards profits and help it measure up to the capital adequacy requirements laid down by the Reserve Bank of India (RBI).

Speculation is rife that US-based Newbridge Capital and Warburg Pincus are interested in buying a stake.

A special committee constituted to speed up the process of capital infusion will meet regularly to evaluate proposals. It will size up the resources available to the bank, and find a partner with a unique combination of market intelligence and a proven track-record. The panelís ideas will be put before the board.

The possible rise in Global Trustís foreign equity comes at a time when private banks have increasingly been farming out stakes to overseas investors. In some instances, they have even given away a controlling stake.

ING group bought 24 per cent in Vysya Bank from its Indian promoters for Rs 340.8 crore. Rana Talwarís Sabre Capital Worldwide invested Rs 129 crore in Centurion Bank for 48 per cent of its equity along with management control. Earlier, the Commonwealth Development Corporation picked up a stake in UTI Bank.

GTB told stock exchanges that its board will meet on September 30 to consider a rise in capital by issuing shares of the bank through a rights basis/preferential offer to investors, including strategic/financial investors.

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