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Canara Bank IPO in 2002

India's state-run Canara Bank said on Tuesday that it will make an initial public offering of equity shares in 2002. Canara Bank chairman and managing director R J Kamath added that his first priority was to consolidate the bank's seven subsidiaries before hitting the capital market.

"I have seven subsidiaries. I want the subsidiaries in trim condition so that I can go in for an IPO and get a good price," Kamath said on the sidelines of a bank economists' conference.

Kamath said he hoped to cut the bank's net non-performing assets (NPAs), or bad loans, to four percent of advances in 2000-2001 (April-March) from 5.23 per cent a year ago.

He said the bank had no plans to enter the insurance sector which was recently thrown open to private firms after decades of state control. "As of now, there are no plans for any joint venture," Kamath said, but added that the bank would sell insurance products of other companies through its network.

Several state-run banks have announced plans to enter the insurance sector through tie-ups with foreign insurance firms.

Kamath said Canara Bank had no plans to reduce its prime lending rates in the immediate future.

Indian markets have been speculating about a cut in domestic interest rates since the US Federal Reserve cut rates on January 5.

India's central Reserve Bank governor Bimal Jalan said on Monday that India was watching the interest rate situation which depended on several other factors.

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