BOR MAY TIE-UP WITH BAJAJ ALLIANZ; DILUTE STAKE TO RAISE FUNDS

Mumbai: Private sector lender, Bank of Rajasthan may terminate its distribution tie-up with United India Assurance for general insurance business and is likely to enter into an agreement with Bajaj Allianz.

The agreement with Bajaj Allianz is expected to be signed this fiscal after which the existing agreement with United India Assurance would cease, a source close to the development said.

"If the alliance with Bajaj Allianz comes through, then the bank would take a decision on whether to continue with the existing tie-up or not," the source said. The bank, which is not among the top performing in the country, may also dilute 5-7 per cent of promoters' holding in a bid to infuse fresh capital of upto Rs 250 crore, the source told PTI.

The bank has been facing difficulties in raising capital from private investors owing to adverse market conditions, sources said. BoR had held talks with a host of fund houses including BNP Paribas, Max India and Avenue Capital Group for investments but it did not get positive response owing to a none-too-good performance.

When contacted, Bank of Rajasthan's Chairman & Managing Director, P L Ahuja declined to confirm or deny. Presently, the promoters hold 37.47 per cent stake in the bank and the remaining 62.53 per cent is held by the public. Source: Business Standard