Calcutta, May 23: Development Credit Bank’s French promoter — Aga Khan Fund for Economic Development (AKFED) — may increase its stake in the bank from 49 per cent to 74 per cent. This year’s budget raised the foreign direct investment cap in banks from 49 per cent to 74 per cent.
H. V. Sheshadri, managing director of the bank, said, “I will be meeting the foreign promoter in the second week of June in Paris where this issue will be discussed. In the past, the fund had increased its stake in the bank when the government had relaxed the norms. The bank will issue preferential shares to the investor.”
However, Sheshadri did not rule out the possibility of any other foreign investor joining the bank. “We have already received offers from other foreign investors. Moreover, six well-known arrangers have already approached us. A decision will be taken after the matter is discussed with our French promoter,” he added.
DCB started as a credit society in 1930. It became a co-operative bank in the eighties and a private sector bank in May 1995. The bank currently has 63 outlets. It is opening two branches in Calcutta and has plans to open 79 branches by March 31, 2004.
Apart from the French fund, Platinum Jubilee Investments holds a 6 per cent stake in the bank and the rest 45 per cent are widely held among 54,000 shareholders.
The bank, which currently has a capital adequacy ratio of 11.47 per cent, plans to increase its Tier-II capital by Rs 120 crore. “A well-known multilateral funding agency has decided to invest in the Tier-II capital. The entire exercise will help us clean up our balance sheet and fund our retail initiative,” Sheshadri added.