Shareholders at the 89th annual general meeting of Karnataka Bank approved a special resolution to raise capital by way of QIP (qualified institutional placement).

The bank’s Chairman, Ananthakrishna, who placed this special resolution before the shareholders, said: “It is only an enabling resolution. We will not do anything that affects the interests of shareholders.”

The management may consider this only if market conditions improve and the move helps the bank to boost its capital. Because of this, existing shareholders shall also benefit, he said.

The resolution had stated that the aggregate amount to be raised through the QIP shall not exceed Rs 500 crore.

Referring to the recent decision of Reserve Bank of India to issue new licences for banking in India, one of the shareholders wanted to know how it would affect Karnataka Bank. In his reply Ananthakrishna said that the bank would take all steps to improve its competitive edge. “Our staff members will respond to the competition and work for growth,” he said.

Another shareholder raised the issue of non-performing assets (NPAs) and asked the bank to bring down this level further.

Terming NPA as an industry-level problem, the Chairman said the NPA of the banking industry stood at 3.12 per cent during 2012-13. However, Karnataka Bank brought down the net NPA level to 1.51 per cent during 2012-13. It was 2.11 per cent in the previous fiscal. The bank will work on reducing it further, he added.

To a query on the bank’s move to reduce interest rates, Ananthakrishna said the asset-liability committee of the bank would take a decision on this.

The shareholders also approved a resolution to declare a dividend of 40 per cent for 2012-13.

P. Jayarama Bhat, Managing Director of the bank, and other directors on the board were present at the meeting.

>vinayak.aj@thehindu.co.in

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