DCB declares net loss of Rs163 crore

Mumbai: The Development Credit Bank (DCB) has recorded a net loss of Rs163 crore on account of provisioning and re-valuation for the fiscal 2004-05.

The bank's promoter, the Aga Khan Fund for Economic Development (AKFED), which is the majority shareholder of the bank at 68 per cent, recently strengthened the bank's balance sheet through an investment of $32 million (Rs140 crore) and has increased its provisions on its non-performing assets (NPAs).

Coverage of NPAs now stands at 54 per cent, the bank said. The fresh capital infusion has helped the bank absorb the impact of the depreciation of its investments in government securities, which were re-valued on a mark-to-market basis in September 2004, the bank said.

The capital adequacy ratio (CAR) is within acceptable norms at 9.8 per cent. Going forward, the bank plans to further strengthen its balance sheet and proposes to raise capital during the current financial year.

The bank has also undertaken a cost-cutting exercise by trimming down its staff by 20 per cent from a year ago.

The bank has also appointed former IDFC Managing Director Nasser Munjee as its chairman with effect from August. He succeeds Naushad Padamsee, who has served as chairman since 1995.