Joel Rebello

Mumbai: The promoters of Development Credit Bank (DCB) are in no hurry to trim their stake to the Reserve Bank of India-permitted 10% levels. The bank, promoted by the Aga Khan Fund for Economic Development, is among a handful of private sector banks that have not yet met the RBI stipulation.

There is no set timeframe for cutting promoters stake as of now, bank officials said. The Aga Khan Fund currently holds 25.1% stake in the bank.

Gautam Vir, managing director and chief executive officer, DCB, said the bank is in constant touch with the central bank on the issue.

“The RBI is also aware that a dilution is difficult, especially when the stock price is moving up so quickly. And, if we need money, I will look at the better option given the market conditions because sometimes it makes sense to go for Tier II because we have enough room for Tier II,” he said.

The bank has a capital adequacy of 15.4% currently and does not require more funds for the rest of the year.

The bank raised Rs 186 crore through an initial public offering (IPO) in October 2006. The shares have risen handsomely over the last one year to the current price of Rs 110 on the BSE.

The bank had recorded a net profit of Rs 7.37 crore in 2006-07 after a loss of Rs 85.26 crore in 2005-06. In the first half of the current fiscal, the bank made a profit of Rs 20.23 crore.

Source : DNA