Allahabad Bank has decided to defer its right issue and perpetual debt for the time being. The bank intended to generate Rs 2,500 crore through tier I and II capital through this right issue. Some other banks such as the Union Bank of India and Syndicate Bank have also decided to defer right issue.

The Chairman and Managing Director of Allahabad bank, K R Kamath said the bank do not want to dilute the stakes of the government at this time. The bank would wait for right time carry out right issue. It is recalled that the government holds 55.23 per cent stake in the Kolkata-based bank. 

The government has allowed only the State Bank of India to offer a right issue so far. The board of directors of Allahabad Bank had sought approval from the union finance ministry for right issue in the month of June. However, the government has not responded yet.

The former CMD of the bank, A C Mahajan had already ruled out any possibility of raising funds through perpetual debt. The bank intends to increase its loan growth by 20 per cent and deposits by 17 percent for the current fiscal. The CMD of bank hoped for Capital Adequacy Ratio (CAR) of 11 per cent and a net interest margin of 2.75 per cent for the current fiscal.