"The bank has planned an initial public offer at a premium of Rs 10 per share to raise Rs 15 crore in order to increase the networth of the bank to Rs 50 crore by 2002," Nainital Bank Ltd, chairman Satish C Ahuja said. NBL, which celebrated its platinum jubilee, has a networth of Rs 16.6 crore.He said the bank plans to come out with the issue in 2001-2002 and has already given the proposal to BoB for approval. The Reserve Bank of India (RBI) has stipulated that oldprivate sector banks have to increase their networth to Rs 50 crore by year 2002 and the public issue is primarily for this purpose, Ahuja said.

Ahuja said, NBL last year had mobilised Rs 3 crore through a rights issue at a premium of Rs 10 per share. He said the financials of the bank were very strong with book value of Rs 67 per share.

The bank has also planned to open specialised branches for rice millers in Taria Belt in Western Uttar Pradesh and a personal banking branch at Lucknow. The bank, which has 53 branches in Western UP, Delhi and Haryana, plans to open 14 more branches by year 2002. "We have licence from RBI to open 14 branches, out which four branches - two in Delhi, one each in Ghaziabad and Noida- will be opened shortly," he added. Ahuja said the bank was expected to report net profit of Rs 4.5 crore in the current fiscal compared to Rs 3.38 crore in 1998-99.

The increased profitability last year was due to lowering of non-performing assets to 2.84 per cent from six per cent in1997-98, when the bank reported net profit of Rs 1.58 crore, he added.