Bangalore, Oct 19 (IANS) Canara Bank, one of India's top scheduled banks, plans to raise $300 million in foreign currency to shore up its capital base, a top bank official said here Thursday.
'We will raise about $300 million (Rs.13.8 billion) in the overseas market under the upper tier-two or hybrid tier-one during the third quarter (October-December) of the current fiscal to maintain our capital adequacy ratio (CAR) above 12 percent,' Canara Bank chairman M.B.N. Rao told IANS here Thursday.
During the second quarter (July-September) of this fiscal, the bank has raised Rs.5 billion through subordinated bonds and Rs.5.75 billion under upper tier-two to strengthen its capital base.
'Resources in excess of Rs.30 billion are being raised in this fiscal to maintain the CAR above 12 percent and fund expansion, diversification of operations and comply with Basel II norms. We have already put in place an integrated risk management mechanism to be Basel II complaint within the stipulated timeframe of March 31, 2007,' Rao said.
The bank's CAR stood at 12.27 at the end of Sep 30 as against the nine percent norm mandated by the Reserve Bank of India (RBI), but marginally lower than 12.35 percent it had in the same period last fiscal.
The bank is in talks with an overseas partner to enter into the life insurance sector. It hopes to finalise the agreement by the end of the current quarter.
The bank is also in the process of setting up a joint venture in asset management with a strategic partner to enter mutual fund business and bank assurance during the current fiscal.
As part of its overseas expansion plans, the bank has applied to the RBI for licenses to open 21 branches in the Gulf, North America and Far East.