J&K Bank approves plan to raise Rs 4500 cr capital

ZT News Network

Srinagar: The Jammu & Kashmir Bank’s Board-of-Directors have approved the bank’s plan to raise capital up to Rs 4500 Cr in the current financial year.

During a meeting chaired by the bank’s CMD R K Chhibber at the bank’s headquarters through video conferencing, the board approved the proposal of ‘raising Equity Share Capital up to Rs 3500 Cr in one or more tranches by way of Rights Issue/Preferential Allotment/Private Placement/Qualified Institutional Placement (QIP)/ESPS or any other approved mode.’

The board also approved the ‘raising of Capital up to Rs 1000 Cr by way of Non- Convertible, Redeemable, Unsecured, BASEL III Compliant, TIER-II bonds in the nature of debentures on a private placement basis.’ The bank will now place the board’s decision in its upcoming Annual General Meeting (AGM) for approval of its shareholders, as all such board decisions are subject to approval of shareholders at the ensuing AGM in addition to other regulatory approvals.

The decision has been taken to improve the bank’s capital adequacy to meet Basel-III norms in the coming quarters. The capital cushion shall support the bank in its future growth and development and also increase its risk bearing capacity.

Earlier on 25 th August, the bank had informed the regulators about the meeting, of its board of directors scheduled for August 28, 2020, to consider the raising of capital (Tier I/Tier II) to the tune of Rs 4,500 crores during the FY 2020-21.

Notably, the markets responded positively to the news as the bank’s share price went up by 4.26 percent on the week ending 28 th August, 2020 to Rs 19.60 apiece from the previous day-end price of Rs 18.80.