MUMBAI, MARCH 31: Indian Bank will extend financial support to its mutual fund subsidiary Indian Bank Mutual Fund (IBMF) to keep up its commitment to pay assured returns amounting Rs 48 crore to investors in the Indjyothi scheme. S Rajagopal, chairman and managing director of Chennai-based Indian Bank who is also the chairman of the Board of Trustees of IBMF, announced that separate communication will be sent to the investors soon.It may be recalled that the Indjyothi scheme, an income scheme launched in December 1990 by the IBMF is to be redeemed on March 31, 1998 in terms of the offer document at a net asset value (NAV) prevailing on that date. The scheme has paid dividends aggregating to 93.75 per cent from the date of launch till the date of maturity as against the aggregate of 73 per cent assured under the scheme. Due to difficult capital market conditions, the scheme could not generate sufficient surplus to meet the minimum assured returns of 14.75 per cent and 15.25 per cent per annum for the years1996-97 and 1997-98 respectively. However keeping in mind the interest of unitholders, Indian Bank has agreed to meet the assured dividend for 1996-97 and 1997-98 amounting to Rs 48 crore.
The MD also stated that the central government has contributed Rs 1750 crore towards the capital of Indian Bank on February 17, 1998 to enable the bank to meet the gap created by application of the prudential income recognition and provisioning norms and also to strengthen the capital reckoned with reference to risk weighted assets. The bank had incurred heavy losses as its non-performing assets non-performing assets (NPAs) touched Rs 1800 crore. ``Taking into account the contribution from the Government and based on the audited balance sheet as on March 31, 1998 the networth of the bank amounts to Rs 664.07 crore with the bank achieving a capital adequate ratio of 8.81 per cent,'' Indian Bank said.
Copyright © 1998 Indian Express Newspapers (Bombay) Ltd.
