Development Credit Bank (DCB) is all set to announce its entry into the micro finance market by opening a branch in Dadiapada, Gujarat on September 11, 2007.
"The branch will be promoted by the Aga Khan Fund for Economic Development (Akfed), which has a rural network in the state," said N Munjee, chairman, DCB.
The bank intends to open three more branches in rural Gujarat by next year, he added.
"After Gujarat we would like to move on to Madhya Pradesh and then to Uttar Pradesh as there is a huge untapped market for rural credit," Munjee said.
DCB opened a branch on Kolkata’s Brabourne Road today.
"This is the third branch in Kolkata, and the bank has received the permission from the Reserve Bank of India to set up eight new branches across the country," announced Munjee.
DCB intends to increase its share of retail business to 40 per cent over the next one year owing to the high interest in the sector, said, Gautam Vir, managing director of DCB
While addressing the media, Vir said, "DCB has always had a prominent focus on the western corridor of India and opening of branch is part of a larger and aggressive retail growth strategy to maximise our potential by catering to large business communities in the region."
"We foresee a huge potential in the retail sector, and with this end in view we are planning to have 40 more branches in a couple of years," he added.
For its proposed preferential allotment, the bank got shareholders's nod at the last AGM and was now waiting for the approval of RBI. The fresh issue of shares will constitute upto 16.6 per cent of the bank's post issue share capital and this injection of fund is expected to increase the net worth of the bank to Rs 600 crore from Rs 300 crore, coupled with the capital adequacy ratio increasing to 17 per cent from 10.5 per cent, said Vir.
The investors include Tata Capital, UAE based Al Bateeb Investment Company, GRA Finance Corporation, Mauritius, UK based Schroders and India Capital Opportunities 1, Mauritius and each issue were priced at Rs 105.
The new dilution will bring down the share of the Akfed to 25 percent from the current 29 percent.
Vir also said that the bank was pushing hard to bring down the current net non performing asset below one per cent (1.5 per cent at present), by the next financial year.