DCB chairman Naseer Munjee (right) with CEO and managing director Gautam Vir in Calcutta on Monday. Picture by Kishor Roy Chowdhury

Calcutta, Aug. 13: Development Credit Bank Ltd plans to open 30 to 40 branches in the city in the next two to three years. The bank today opened its third branch here.

“We follow a cluster approach in expanding our branch network. Calcutta is a very important cluster for us because of the industrial resurgence and growing trading activities in the state,” said Gautam Vir, managing director and chief executive of Development Credit Bank Ltd.

“So far, we have a small presence with only two branches here. Today we opened a third one here. It is basically a relocation of a Mumbai branch. We are relocating three branches from Mumbai. One will be in Calcutta, another in Delhi and the other in Chennai. In the next 2-3 years, we plan to open 30 to 40 branches in the city,” he added.

“Traders form a significant part of the city’s population, which has a long history of trading activity. Financing trades and trade-related activities is also an important business stream for DCB. Calcutta is also the gateway to the Northeast,” Vir said.

DCB was converted into a scheduled commercial bank in May 1995. The bank has a deposit base of Rs 4,700 crore, while its total advances were Rs 3,000 crore at the end of the first quarter. “At present, our balancesheet size is Rs 5,600 crore and we want it to double in the next two years,” Vir said.

The bank has proposed to raise Rs 310 crore through a preferential allotment of shares to foreign and domestic financial institutions, including Tata Capital, Al Bateen Investment of UAE, India Capital Opportunities of the Mark Faber group, DCB Investments, Mauritius-based GRA Finance Corporation and the Schroder Venture Group. “The allotment will be made at a price of Rs 105 a share,” Vir said.

After the issue of 3 crore shares, comprising 16.60 per cent of the bank’s post issue capital, the shareholding of FIIs will go up to 38 per cent from 31 per cent at present and that of promoter Aga Khan Foundation will come down to 25 per cent from 30 per cent now.

Under the RBI’s stipulation, the Aga Khan Foundation is required to bring down its stake in DCB to 10 per cent.

“We are in talks with the RBI to prepare a roadmap to reduce the promoter’s stake to 10 per cent. However, we will have enough capital with this tranche of fund raising. A further dilution of the promoter’s stake may not be forthcoming in the next 18 months,” said chairman Naseer Munjee.