Financial Daily from THE HINDU group of publications
Tuesday, Jul 05, 2005
Money & Banking
Regional Rural Banks
Syndicate Bank to merge RRBs in Karnataka
Mr N. Kantha Kumar, CMD, Syndicate Bank, at a press conference in the Capital on Monday. Kamal Narang
New Delhi , July 4
SYNDICATE Bank is to consolidate four of its regional rural banks (RRBs) in Karnataka into one RRB.
This is in line with the policy formulated for consolidation of RRBs, which requires a sponsoring bank having more than one RRB in a State to consolidate all the RRBs under it into one.
"The Karnataka Government has given the no-objection certificate for the merger. We have four RRBs in that State, which would now be consolidated into one," Mr N. Kantha Kumar, Chairman and Managing Director, Syndicate Bank, said at a press conference to announce the Bank's follow-on public offering.
The Bank has in all sponsored 10 RRBs with a network of 1,163 branches spread over 28 districts in five States i.e. Andhra Pradesh, Haryana, Kerala, Karnataka and Uttar Pradesh.
Syndicate Bank is entering the capital market on July 7 with a follow-on public offering through the book-building route.
Of the total offer of 50 million equity shares, the bank has reserved 5 million equity shares to be offered to its eligible employees.
Of the balance net offer of 45 million shares, 22.50 million equity shares i.e. 50 per cent of the net offer are reserved for allotment to qualified institutional buyers on a discretionary basis and 6.75 million shares i.e. 15 per cent of the net offer are reserved for allotment to non-institutional buyers.
The balance 15.75 million shares i.e. 35 per cent of the net offer would be allotted to retail investor on a proportionate basis.
"The issue is being made to augment the capital requirements in keeping with the Basle II norms and also to meet our future growth objectives," Mr Kantha Kumar said.
After the follow-on public offering, the Government holding in the bank would come down from 73.5 per cent to 66.5 per cent.
Besides the second public offering of equity shares, the Bank had recently bolstered its tier II capital through a bond offering.
The Bank had, in mid-June, issued bonds for Rs 500 crore with tenure of 118 months and a coupon rate of 7.4 per cent per annum.
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