Dhanlaxmi Bank is all set to enter into the retail loan business this year in the month of July. The bank has plans to raise capital worth Rs. 150 crore via bonds issue.

The bank says that money collected in this manner would add up to its Tier II capital and help it maintain its capital adequacy ratio (CAR). Capital adequacy ratio is the ratio of a bank's capital funds to its risk weighted assets expressed in percentage terms.

The current CAR of the bank is 14.29%.

"To achieve our business expansion targets we need to maintain a healthy CAR. As a part of the process, we are now raising Rs 150 crore through a corporate bond issue next month," chief financial officer, Bipin Kabra said.

Kabra said that the bank's loan book has shown a growth of 50% in the current year amounting to Rs. 5, 000 crore. He expects the loan book to grow even faster in the coming year owing to economic recovery.

In the upcoming years it is expected that the retail assets would comprise of 30% of the retail loans.

The bank's total advances as on March 31, 2009 were Rs. 3, 196 crore.

"Initially, we are going to roll out the business from 46 cities and smaller town across India. We will be offering products in secured loan category only, such as mortgages, loans against property and vehicles. Later, we will add personal loans to our suite of products," Kabra said speaking on retail loans.

The bank is also on hiring spree and would be hiring 2, 500 new employees this fiscal of which 600 would be exclusively for retail segment.