Chennai, July 04: Dena Bank has drawn up plans to improve its capital adequacy ratio (CAR) significantly by March ‘04. Recovery of NPAs, profits from selling surplus property and pruning expenditure are among options it is looking at. It also plans to tap the market with a rights issue after March ‘04. Besides, the bank has been exempted from building up investment fluctuation reserve. Dena Bank’s CAR stood at 9.3% on March 31, ‘03. However, CAR would slip down to 6% if the bank considers deferred tax assets as intangible assets as required by the RBI.

AG Joshi, CMD, said the bank is looking at various options in a bid to shore up its capital. “We had asked the government to recapitalise the bank to the tune of Rs 170 crore, which would boost our CAR to 10%. But since, as a policy, the government would not recapitalise, we are seriously looking at other options,” he said.

The bank, Joshi said, has been making profits in the last two years. With one more year of profits, it would be in a position to raise fresh capital from the market. But prior to that, it plans to improve its CAR by NPA reduction, profits through sale of property and cutting down expenditure.The bank brought down its net NPA by 672.9 crore in ‘02-03 (against Rs 428.5 crore in the previous year). It also stalled the accumulation of fresh NPAs to Rs 293.5 crore from Rs 496.3 crore earlier. Net NPA was down to 11.8% from 16.3% a year back, he said. Bureau Report