The International Finance Corporation (IFC) will join the league of investors such as Oppenheimer Funds, Kuroto Fund LP and Citigroup Global Markets, to pick up a substantial stake in Mangalore-based Karnataka Bank, a private bank. Karnataka Bank incidentally does not have any domestic or foreign promoters.
Sources close to the development said that the investment arm of the World Bank is expected to pick around 5% stake in Karnataka Bank.
When contacted, Ananthakrishna, chairman and managing director of Karnataka bank, while confirming the developments, said, “We are holding a board meeting on later this week to discuss various issues, including the proposed IFC investment in the bank. It is an equity-based investment from IFC. The size of investment and the exact stake will be known only after the board meeting”.
According to him, the proposed funds will be utilised for meeting the capital adequacy ratio (CAR), which is at little over 11%. In addition to that, the funds will be also be utilised for expanding its presence across the country, he added.
Currently, the bank has 411 branches and will add 24 branches to take the total size to 435. The bank’s total assets estimated at Rs 16,000 crore.
