New Delhi, May 10: Buoyed by "overwhelming" response to its recently concluded Public Offer, Bank of Maharashtra is keeping options open on further market borrowings and would focus more on retail lending. "If required (for business growth), we will borrow money from the market," chairman, Bank of Maharashtra, S C Basu, said. However, as of now, the bank has no plans to go in for borrowings, he added. "This year we have decided to strengthen our retail portfolio by greater lending in the sector and it will be diversified," he said. About the public offer through which the bank had raised Rs 230 crore, an over-subscription of 11.2 times, he said it had invested the proceeds in various sectors like retail and infrastructure. Basu said the capital adequacy ratio had gone up to 12 per cent which is well above the reserve bank-mandated nine per cent. Started with an authorised capital of Rs 10 lakh in 1936, the bank is now capitalised to over Rs 500 crore. On bad loans, he said the bank had targeted to bring down the net non-performing assets to less than two per cent of the net advances in this financial year. The bank's plans come in the wake of recent RBI directive to banks on dividend payment to shareholders.
According to the revised RBI guidelines, from March 2004, only those banks with capital adequacy ratio of at least 11 per cent and net non-performing assets below three per cent would be eligible to declare dividends without prior approval of the Central Bank. Limiting the dividend pay out to 33.3 per cent of the net profit, RBI also said the banks, which do not meet the criteria, should obtain its prior approval before declaring dividend. The requests received from these banks would be considered on a case-to-case basis. Bureau Report