Mumbai: Centurion
Bank has requested the International Finance Corporation (IFC) and
the Asian Development
Bank (ADB) to increase their equity holding in the bank. At
present, IFC holds 10.2 per cent while ADB holds 8.4 per cent
equity respectively in Centurion Bank.
The bank has made a
similar proposal to one of its other foreign shareholders, the
Keppel Group of Singapore, to increase its capital from 17.7 to 20
per cent.
Centurion Bank needs to
spruce up its capital, as its present capital adequacy ratio is
below the RBI-stipulated 9 per cent. To reach the 9-per cent
capital adequacy level, the bank needs an infusion of Rs 120 crore.
The three foreign
shareholders of the bank - the Keppel Group, IFC and ADB - are
keen that the banks capital be increased. Nevertheless, there
has not been a commitment from either of them yet.
In 1999-99, when
Centurion Bank took over the assets and liabilities of the 20
Century Finance Corporation,
one of the conditions was that if the banks NPAs crossed a
certain level, then the promoters will have to make good the
losses by bringing in fresh capital. The promoters will have to
bring in about Rs 25 crore this year to meet this condition.
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