MUMBAI, OCT 5: The Reserve Bank of India (RBI) has permitted Karur Vysya Bank to pay a dividend of 50 per cent to its shareholders. This is the first instance of a private sector bank being allowed to pay more than the stipulated 25 per cent dividend this fiscal.

Going by the norms, no bank can pay dividend over 25 per cent without seeking the permission of the Reserve Bank. The central bank's green signal to Karur Vysya Bank to pay a higher dividend to its shareholders assumes significance since RBI had earlier turned down similar requests by other private sector banks.

Karur Vysya Bank, which has a paid-up capital of Rs 6 crore, posted a net profit of Rs 36.06 crore for the year ended March 31, 1997, indicating a rise of 11 per cent over the previous year's net profit of Rs 32.24 crore. The bank's earnings per share stood at Rs 60.12 against Rs 53.87 per share during the previous year. The dividend payout for the 1996-97 financial year would translate into an outgo of Rs 3 crore for the bank.

Karur Vysya's total income during 1996-97 stood at Rs 253.27 crore, a rise of over 17 per cent over the previous year's total income of Rs 209.29 crore. The bank's interest income during the year stood at Rs 220.31 crore while other income was at Rs 32.96 crore.

The bank's interest expenses were higher at Rs 143.44 crore during 1996-97 as against Rs 122.33 crore during the previous year. Karur Vysya Bank's deposits for the year ended March 31, 1997 stood at Rs 1,575.49 crore, a rise of almost 27 per cent over the previous year's deposits of Rs 1,158.80 crore. Advances during 1996-97 stood at Rs 956.26 crore against Rs 824.30 crore in the previous year, indicating a rise of 14 per cent.

The Karur-based bank has huge reserves of Rs 115.48 crore and its book value at the end of the 1996-97 financial year stood at Rs 202.50. In its modernisation drive, the bank has recently launched tele-banking services at one of its branches. It has computerised 55 of its branches and 20 more would be computerised during the current fiscal. Karur Vysya Bank currently has 192 branches and proposes to add 12 more.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.