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Karnataka Bank has said that it may go ahead with its decision to raise capital once it is convinced about the right price.

This has been mentioned in the transcript of the earnings conference call the bank had with analysts and investors recently. The bank informed the stock exchanges on the ‘update on conference call’ on Tuesday.

Asking a question about the additional capital the bank was planning to raise, an analyst wanted to know if the bank is going to defer the capital raising for sometime considering the current market condition.

Replying to him, Mahabaleshwara MS, Managing Director and Chief Executive Officer of the bank, said: “For the time being, there is no question of deferring or shelving the said special resolution, which we had from the shareholders in March,which is valid for one year. During this period, once we are convinced about the right price, at that time we may go ahead.”

Mahabaleshwara said the capital adequacy ratio of the bank is presently at 12.66 per cent against the RBI-stipulated minimum of 10.875 per cent. Internally, the bank has a policy of having at least 1 per cent over and above the regulator’s stipulation, he said.

“So for the time beingthere is no dearth for capital. But nevertheless, going forward, we will take a decision on this issue at the appropriate time,” he said.

It may be mentioned here that the January 27 meeting of the board of directors of the bank had taken a decision to raise capital funds through QIP.

On March 5, the bank informed the stock exchanges that the special resolution on approval for issue of shares under QIP was approved by the shareholders of the bank.

Published on June 23, 2020

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