Dena Bank CMD P.L. Gairola (right) with Ficci (eastern region) chairman C.K. Dhanuka in Calcutta on Friday. Picture by Kishor Roy Chowdhury

Calcutta, July 13: Dena Bank plans to partner the State Bank of India for its foray into credit cards. The SBI already has a profitable credit card business in association with GE Money.

“We are planning to enter the credit card business and are, therefore, considering a tie-up with the State Bank of India. We had preliminary talks with the SBI. But the board of directors of neither the SBI nor Dena Bank has approved the tie-up arrangement yet,” P.L. Gairola, chairman and managing director of Dena Bank, said on the sidelines of a banking conclave organised by the eastern regional council of the Federation of Indian Chambers of Commerce and Industry.

Dena Bank is also planning to enter non-life insurance through a joint venture with some local banks and a foreign insurer. “We are looking at a 26 per cent stake in the insurance company. However, the insurance venture is only at a conceptual stage now. We may arrive at a concrete decision by the year-end,” Gairola said.

The bank now sells policies of public sector insurer Oriental Insurance Company as a corporate agent.

Dena Bank earned Rs 8 crore last financial year by distributing third-party products. “For the current financial year, we are aiming at an income between Rs 40 crore and Rs 45 crore from this segment,” Gairola added.

The bank also plans to raise Rs 300 crore to meet its capital requirement for an expected 22 per cent growth in credit in the current financial year. Its net advances were Rs 18,700 crore on March 31 this year. “Our capital adequacy is 11.52 per cent and we have a headroom to raise funds up to Rs 800 crore. But we will go in for Rs 300 crore as this will be sufficient to support a 22 to 25 per cent credit growth during 2007-08,” Gairola said.

Under an arrangement with the ministry of railways, Dena Bank will set up 117 ATMs and 85 kiosks for e-ticketing at stations.

The bank also plans to set up 35 branches this fiscal. It now has a network of 1,140 branches.

To increase its rural reach, the bank has tied up with the department of posts.

“India Post has an unmatched rural network and villagers trust the postmen the most. We have tied up with India Post recently whereby the post office people will act as facilitators for bank loans. If a villager wants a bank loan, he or she can approach the nearby post office. The post office will then forward us the loan request. We will also be able to leverage the manpower of post offices to recover loans. However, we will have to pay a service charge to India Post,” Gairola said.

The bank is also setting up biometric ATMs in rural areas.