SIB to raise capital base

MUMBAI, Dec 16: South Indian Bank (SIB), a leading private sector bank from Kerala, will increase its capital base through a rights issue o...

MUMBAI, Dec 16: South Indian Bank (SIB), a leading private sector bank from Kerala, will increase its capital base through a rights issue of equity and a bond issue to enhance its capital. The bank had privately placed around 26 per cent of its equity with various companies belonging to ICICI and its group companies three years ago to improve its capital base.

“We have around 40,000 shareholders spread across the country. The major shareholder is ICICI,” said Maurice D’Souza, chairman of the bank. The bank has a deposit base but there is no corresponding growth in the credit offtake. The bank has opened an industrial finance branch in Mumbai on Monday.

ICICI has 26 per cent of the equity and a representative in the board. He said the bank is not susceptible to any takeover move from ICICI because of 41,000 shareholders.

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ICICI has already acquired considerable stake in Federal Bank which is the largest private sector bank in the country with a large branch network.

South Indian Bank is the second largest private sector bank in the country.“Due to a huge NRI deposit base in the state and poor industrial demand for credit in the state, the credit deposit ratio is also poor,” he added. The bank which has got 351 branches has made working arrangements with ICICI on the lending side. Its total deposit is Rs 2280 crores and total advances Rs 1200 crores. “The bank will continue to remain a Kerala bank and I don’t think ICICI will take over the bank,” he said.