India's UTI Bank says to raise tier-1 capital

Singapore, Apr 11: India's UTI Bank said on Tuesday that it would raise tier-one capital, possibly up to 0 million.

''We will raise tier-one capital,'' Chairman and Managing Director P.J. Nayak said at a news conference in Singapore.

He added that the bank was currently in discussion with the Reserve Bank of India (RBI).

The issue, expected to be completed by the end of the year, could be listed either in London or Singapore, he said.

Nayak was in Singapore to open UTI'S first overseas branch.

UTI has 20 billion rupees in tier-one, allowing it to raise a maximum of 0 million.

''It will be a fairly large-sized issue,'' Nayak said, without giving further details.

Last year India had imposed a 5 percent limit on foreign bank ownership in domestic banks.

Britain's HSBC Holdings had taken a more than 14 percent stake in UTI in 2003 but had to pare down its stake to comply with the rules. The British bank sold a 7.19 percent stake in February bringing its UTI holdings down to 4.99 percent.

Last year, UTI, ranked sixth by market value among private Indian banks, raised 7 million in global depositary receipts to feed raising loan demands in an economy that is growing at 8 percent.

UTI had said it did not expect more equity dilution for another three years but Nayak indicated in January that another issue might be needed sooner due to strong growth.

REUTERS