Mumbai, April 27: The Industrial Development Bank of India (IDBI) has decided to reduce its stake in IDBI Bank to 75 per cent. This is in line with the Securities Exchange Board of India's norm that companies, in order to get listed, will have to place at least 25 per cent of their share capital with the public. The core size of the maiden issue is pegged at Rs 35 crore. While IDBI Bank's public issue plans are still at the drawing board stage, senior officials in the bank have said that the issue is likely to hit the market after November, 1998, when the bank completes three years of operations.The public issue will help the bank boost its capital adequacy ratio, which stands at 10.50 per cent. For the year ended March 31, 1998, IDBI Bank's deposits witnessed a three-fold rise to Rs 1,842 crore against Rs 505 crore during the previous year. However, the bank's reliance on certificates of deposit (CDs) is what has helped it record a phenomenal growth in its deposit base. CDs constituted nearly 30 per centof total deposits (Rs 553 crore).
IDBI Bank's advances during the same period more than doubled to Rs 1,042 crore from Rs 495 crore during 1996-97. The bank has set itself a deposits and advances growth rate of 25-30 per cent and 20-25 per cent respectively during the current year.
The bank managed to restrict its sticky loans to 0.40 per cent of its net advances during 1997-98 by limiting its exposure to different corporates. IDBI Bank's largest exposure is to the engineering sector which constitutes 12 per cent of its total advances portfolio. The bank's priority sector lending constituted 35 per cent of its total advances.
Speaking to newspersons on Monday, IDBI Bank managing director Deepak Mukherjee said that the bank is currently exploring the possibility of launching "SmartCard" which will enable customers to undertake cashless transactions.
Currently, the bank is in talks with the Chandigarh Electricity Authority and BEST in Mumbai for a tie-up to extend the SmartCard services to itscustomers.
IDBI Bank, which currently has 18 branches, proposes to add another seven branches to its network.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
