Canbank MF to redeem Canstar Scheme

MUMBAI, AUG 19: Canbank Mutual Fund is to redeem units under its Canstar scheme next month at an assured return of Rs 40 per unit as again...

MUMBAI, AUG 19: Canbank Mutual Fund is to redeem units under its Canstar scheme next month at an assured return of Rs 40 per unit as against the current net asset value of Rs 13 per unit.

On the Bank’s initial public offer (IPO), whose size was likely to be in the range of Rs 250 to Rs 300 crore, Gupta said, it was waiting for favourable conditions in the stock market and added that before the end of the current financial year it would tap the capital markets.

In financial year 2000-01, it was targetting a 15 per cent growth in deposits at Rs 55,000 crore and a 27 per cent rise in advances at Rs 30,000 crore as against the previous year, he said.

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To keep pace with growing business, the bank would raise Rs 300 crore by way of tier II capital through a subordinated debt issue of five to seven years maturity next month.

"Earlier we were expecting a coupon rate of 11.5 per cent but with the bank rate and cash reserve ratio going up the coupon rate, which will be fixed by our merchant banker, is also likely to rise," Gupta averred.

On its entry into the insurance business, he said, the proposal had not yet been placed before the board of directors and no decision had been taken on whether to go it alone or form a joint venture either in the life or non-life sector.

The bank had set a recovery target of Rs 1,000 crore in the current fiscal and was expecting to reduce its net non performing assets to net advances to four per cent as against 5.2 per cent as on March 31, 2000.

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On the outstandings of Amitabh Bachchan Corporation Ltd (ABCL) towards the bank, Gupta said, out of a total amount of Rs 10 crore only Rs 2.4 crore remained to be paid as last instalment by next month. He categorically stated that the bank had not pressed for attachment of the filmstar’s bungalow in Mumbai.