Mumbai: Canara Bank will sell shares to institutional investors through a qualified institutional placement (QIP) by the first half of November, the bank’s chairman and managing director R.K. Dubey said on Tuesday.

The bank is planning to raise 3,500 crore and is awaiting approval from the Union government for the share sale, Dubey added.

“We had started the process presuming that it will happen before September but until all approvals are in place, we cannot go ahead. We had the board’s in June, the process is taking time. Now, I think it will happen in end of October or first fortnight of November," Dubey said.

The bank had planned a roadshow to meet likely investors earlier this month but that was put on hold because it could not get permission from the government.

Dubey said he expects credit demand to pick up once corporate demand for loans increases, as demand for loans from individuals, small and medium enterprises (SMEs) and agriculture is strong.

“Corporate credit demand is still slow. Our retail, SME and agriculture growth is very robust at around 25-40%, so if corporate growth even improves to around 10-15% then we will see 17-18% credit growth (this fiscal). Credit growth is also better in the last two quarters," Dubey said.

Canara Bank has not sold any non-performing assets (NPAs) to asset reconstruction companies (ARCs) so far in the current quarter, but expects some sales to happen in the next 15 days, Dubey said.

Demand for NPAs from ARCs has come down because recent changes in Reserve Bank of India (RBI) norms say that ARCs have to put in 15% of the value of the asset upfront while buying the loan, up from 5% earlier.

“There has not been any sale of NPA in this quarter, we are all in the market. Deals are going to be finalized in the next 15 days," Dubey said, adding that sales of NPAs to ARCs will help Canara Bank reduce NPAs this year.

Fresh additions to NPAs for Canara Bank has slowed this year, making Dubey optimistic that NPAs will ease further.

“In this quarter, we have not had any account. So things have started settling down and fresh slippages have reduced. I am expecting by September quarter my NPA would go down to 2.4 % from 2.6% in June quarter," he said.