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Allahabad Bank to raise Tier-II capital

By Our Staff Correspondent

KOLKATA DEC. 31. Allahabad Bank plans to raise Rs. 200 crore Tier-II capital by the end of this fiscal. The bank is also planning to open two overseas banking units (OBU) at the special economic zones (SEZs) in Noida and Kolkata. Two overseas branches will be opened by 2005. In the domestic market, focus on retail banking would be strengthened further.

Addressing mediapersons here today, O. N. Singh, the newly appointed Chairman-cum-Managing Director, said with the interest rates perceived to be the lowest and might firm up in future, the bank had decided to utilise the maximum possible limit for Tier-II capital.

"We had no urgent need for funds. However, to take advantage of the low interest rates, we have decided to go for it," Mr. Singh said hinting that the interest rates in India could start firming up in the next six months.

The bank, planning to enhance stake in the international business, has decided to set up one of the OBUs in Noida. "The other one could be set up in Kolkata". Overseas branches will necessarily be set up in the developing nations of South and West Asia including China.

"We had already conducted a preliminary survey. The final decision will be taken after a detailed scrutiny of the business interests and the related norms of the respective countries". The bank does not rule out the possibility of forming a joint venture with other PSU banks in India or with banks of a foreign origin. On the domestic front, another 100 retail boutique, in addition to the existing 250, will be set up to enhance the bank's physical coverage primarily in the Gangetic belt. "Our aim is to enhance the retail lending to Rs. 4000-4500 crores in the next fiscal". In this connection the branch network would further be segmented with reference to business focus.

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