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Tuesday, May 22, 2007

Syndicate Bank plans follow-on public issue

Syndicate Bank has proposed a follow-on public issue of 8 crore equity shares in the current financial year for meeting its capitalisation requirements.

The decision was taken at its board meeting. The bank said in a stock exchange notification that the issue would be subject to approvals from the Government and the Reserve Bank of India. The pricing of the issue has not been decided, though it is likely to be at a discount to the market price.

The follow-on issue is expected to dilute the government stake further. Currently, the government stake in the bank is 66.47%. With the proposed issue, the government stake is expected to come down to 57.64%. The bank's paid-up equity would rise to 60.19 crore shares.

The issue is being raised to meet the bank's capital requirements for meeting its ambitious growth targets. Besides, Syndicate Bank has a branch in London.

According to the RBI's guideline, banks with global operations are expected to comply with Basel-II guidelines for operational risks by the end of March 2008.

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