Central bank to issue IPO in June

Mumbai, May 15 (UNI) The Central Bank of India will launch its Initial public offering (IPO) next month.

The bank is awaiting approval of the Securities and exchange board of India (SEBI), which is expected in the first half of June, H.A.Daruwalla, CMD of the bank, told UNI today.

The proceeds of the issue will be pumped in to shore up the Bank's basel-2 capital adequacy ratio (CAR) requirements, as directed by the Reserve bank of India (RBI).

The CAR is expected to scale up to 12 percent after the issue from the current 10.40 percent, Daruwalla said.

The funds will also be used for the internal expansion plans of the bank, which mainly include the technological upgradation and strengthening of the Human resource development department.

''The present capital of Rs 1,125.14 crore has been found inadequate to withstand the competetion in banking sector. The bank intends to diversify it's services and also to feed our capital restructuring plans through capital expansion.'', said Daruwalla.

Though Daruwalla refused to divulge the size of the issue, it may come at around Rs 300 crore, banking sources said. The government will offload its share in CBI during the process, possibly by 30 percent.

The bank's business crossed Rs 1,36,265 crore in the year 2006-07 and has registered a 93.77 percent in annual growth posting a net profit of Rs.498 crore for the full year.

UNI