Development Credit Bank plans to raise Rs150 cr

MUMBAI: Development Credit Bank plans to raise Rs150 crMurali Natrajan, managing director and chief executive officer, DCB said,``The bank has board approval to raise Rs300 crore. We plan to raise Rs150 crore by the end of December. We are in talks with lead bankers.’’

`` The capital raised would support the banks growth for next one and half years. Fresh capital infusion would lead to about 4% dilution in existing shareholding,’’ he added.

In October 2010, the old generation private sector bank had postponed its capital raising plan as the equity market was not favorable.

``The market condition will decide the mode through which we will raise capital. The capital markets have not been very good to support a qualified institutional placement,’’ said Natrajan. The bank’s capital adequacy ratio at the end of March 2011 stood at 13.25%. It posted a net profit of Rs11.35 crore in the quarter ended March 2011 as against a loss of Rs 8.16 crore in the corresponding quarter last year. Non performing loans of the bank dipped to 0.97% at the end of March 2011 compared to 3.11% last year. On the back of improved financial performance the bank recently, received Reserve Bank of India approval to set up 10 branches.