Dhanlaxmi Bank to raise fresh capital by December

MUMBAI: Thrissur-based, private sector bank Dhanlaxmi Bank, which is battling charges of alleged irregularities in its accounts raised by an industry union, plans to raise fresh capital by December.

The bank's managing director and chief executive officer Amitabh Chaturvedi said that the lender would need fresh capital to support the bank's growth in the next three months.

However, he declined to comment on the size of capital-raising and the route through which funds will be raised as the bank is in its silent period prior to announcing its second quarter '11 on October 20. The bank is adequately capitalised with a capital adequacy ratio of 11.40% at the end of June 2011. The bank can raise up to Rs 500 crore in the form of Tier-II debt.

Chaturvedi told the media on Wednesday that the allegation of fudging of bank accounts by one of the bank's employee association were baseless. Following this the bank's stock had tanked 10% on Tuesday. On the BSE, the bank scrip ended the day up 2.48% at Rs 66.08 on Wednesday.

The protesting employees represent only 10% of the bank's workforce which would be about 1,298 employees of a total base of around 4,700 personnel, the bank management said.

"Their grudge is that we do not permit new employees to become members of the union. The campaign seems to be handiwork of some misguided employees and some outsiders. We are examining how we can get to the next level of legal action,'' Chaturvedi said.

Source: EconomicTimes