A customer exits an automated teller machine outlet of Dena Bank in Mumbai. (Photographer: Dhiraj Singh/Bloomberg)

Dena Bank Shareholders Approve Rs 1,800-Crore QIP

Dena Bank received shareholder approval to raise up to Rs 1,800 crore through one or more qualified institutional placements of shares, the bank said in a notification to the stock exchanges on Tuesday.

The approval to raise these funds holds for a period of one year. Additionally, the bank has to ensure that the government’s holding, which currently stands at 68.55 percent, must not fall below 52 percent, according to the notification. Shareholders met and discussed the resolution at the bank’s annual general meeting.

This comes at a time when Dena Bank has been placed under prompt corrective action (PCA) by the Reserve Bank of India (RBI) due to its high net-non performing assets, and negative return on assets. Following this, restrictions have been put on the bank’s payment of dividends and its branch expansion. The lender also needs to make higher provisions against loan losses.

At its last earnings press conference, Dena Bank’s Chairman and Managing Director Ashwani Kumar said the bank would not aim to grow its loan book and branch network significantly in financial year 2017-18. The bank has set itself a target of a 5 percent loan growth, and will not open any new branches, he had said.