This will be the second time that the bank will be tapping the capital market. The bank had earlier raised Rs 72 crore through a public issue of equity shares in February 1999. Currently, it has a paid-up capital of Rs 140 crore.

"The debenture issue would enable the bank to sustain the high growth of assets in the recent past," IDBI Bank managing director Deepak Mukherjee said.

"IDBI Bank has a CAR of 11 per cent. After the debenture issue, the CAR is expected to be around 11.5 per cent," the bank chief said, adding that the timing of the debenture issue will be related to favourable interest rates.

"Interest rates on debentures is basically market-driven...so we are waiting for the time when the rates will be comfortable," he said. Customer assets (total advances and credit substitutes) of the bank grew by 23.42 per cent to Rs 2,007.58 crore during the first six months of the current financial year and rose by 71 per cent compared with the corresponding period last year. Total loans and advances grew by 26.2 per cent to Rs 1,355.96 crore as on September 30, 1999 against Rs 1,074 crore on March 31, 1999.

Credit substitutes increased by 18 per cent to Rs 651.62 crore during the period under review. Deposits rose by 16.58 per cent to Rs 3,207.60 crore on September 30 from Rs 2,751.28 crore on March 31. According to Mukherjee, though deposits have risen by more than a quarter during the first six months of 1999, the bank needs to generate more capital to manage a much greater growth in borrowings.