Lakshmi Vilas Bank awaits shareholders’ nod for fund raising

August 9th, 2008 - 6:40 pm ICT by IANS  

Chennai, Aug 9 (IANS) The shareholders of Lakshmi Vilas Bank Ltd (LVB) will take the final decision on a bank proposal to raise Rs.2.5 billion ($59.5 million) through qualified institutional placement (QIP), said a top official here Saturday. “The bank intends to raise Rs.2.5 billion, and QIP is one of the routes. The proposal will be decided by the shareholders in the ensuing annual general meeting scheduled on 14th of this month,” bank managing director V.S. Reddy told reporters.

There was also a proposal to offer a board seat to Federal Bank Ltd that holds nearly five percent stake in LVB, he said.

“In a free market economy, shareholders, who have sizeable stake in a company, are free to ask for board membership,” Reddy added.

According to him, the bank’s capital adequacy ratio (CAR) is now at 12.73 percent and fresh funds are required to meet the bank’s business targets as well as the CAR.

“The bank is targeting to advance around Rs.65 billion this fiscal up from Rs.58 billion (last year). This requires fresh funds,” Reddy added.

Headquartered in Karur in Tamil Nadu, LVB is targeting total business of Rs.150 billion this year.

The bank plans to open 30 more branches this fiscal taking the total branch network to over 280.

LVB will also add 80 more ATMs taking the total to 140.

“We are contemplating whether to increase the prime lending rate (PLR) or not from the current 14.75 percent,” Reddy said.

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