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Tayals eye 49% stake in BoR

Calcutta, Nov. 10: The Tayals, promoters of Bank of Rajasthan, will increase their stake in the bank to 49 per cent in a year.

The bank also plans to enter into the life insurance business by 2005 when it attains a net worth of Rs 500 crore.

At present, the Tayals hold 43 per cent stake in the bank and the remaining 57 per cent is widely held.

Bank chairman P. K. Tayal said, “We are keen to increase our stake to the Reserve Bank of India’s permissible limit of 49 per cent at the earliest.”

“The bank’s earnings per share is Rs 12 and the share price is Rs 30. I feel that the time is ripe for acquiring shares.” The Tayals will opt for the creeping acquisition route to enhance their stake.

The Tayals had acquired 43 per cent stake in the bank through a rights issue in 1999.

Talking about the business roadmap of the bank, Tayal said they have worked out a three-year strategy ending 2006 to attain Rs 12,000 crore deposit and Rs 6,000 crore advances.

At present, the bank has a deposit base of Rs 5299.24 crore and the advance portfolio is Rs 2221.24 crore. The bank has achieved a net profit of Rs 60 crore in the second quarter of the current financial year. Its capital adequacy ratio is 15 per cent.

“The trend shows that the bank will be able to register Rs 130 to Rs 140 crore net profit in the current fiscal,” Tayal added.

The net non-performing asset (NPA) of the bank is 8 per cent (Rs 160 crore) and it plans to bring it down to 2 per cent in the next three years. The bank had recovered Rs 250 crore in the last two years and has written off Rs 100 crore.

The bank has issued 300 notices to defaulting borrowers under the Securitisation Act to recover Rs 100 crore.

The bank is currently present in 16 states and has got licences from the RBI to expand its network. “We want to be present in 25 states soon,” Tayal added. The bank today opened a new branch at Salt Lake.

The bank has tied with Visa for providing credit and debit cards to its customers. It has tied up with Bajaj Alliance for selling general insurance products and Birla Sun Life for marketing life insurance products.

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