In a fresh twist to the drama over the splitting of the post of the chairman and managing director of the UTI Bank, the board of the private sector bank is expected to meet on December 22 to reconsider the decision.

Bank sources said the board might even reverse its decision and consider a 5-year extension for the current incumbent, P J Nayak.

On December 15, the bank's board decided to split the CMD's office and Nayak, whose term expires on December 31, was offered the post of managing director. Nayak turned down the offer.

A UTI Bank executive said the crux of the issue was ownership and control. The Specified Undertaking of the Unit Trust (UTI-I), which holds a majority stake of around 33.22 per cent in UTI Bank, is against the bank raising capital through an overseas issue.

The proposed $150-200 million American depository receipts issue will dilute the parent's holding in the bank to around 26 per cent.

In the board meeting, the promoters and the management are also  expected to discuss the means through which the bank will raise funds.

In addition to the ADRs, the bank may also raise funds through a preferential issue. Such a move would enable the promoters to maintain their current shareholding even after the ADR issue, said sources close to the development.

Senior executives from the bank said raising capital was essential to support the bank's growth plans and shore up its capital adequacy ratio, which was 10.67 per cent on September 30, 2004. The bank is growing at over 30 per cent and hence needs capital to support its new businesses.

Apart from this, going by the new norms of the Reserve Bank of India, only those banks that have a capital adequacy ratio of over 11 per cent can declare dividends. In case of a lower capital adequacy ratio, banks need special permission from the RBI on dividends.

The UTI Bank stock ended the day at Rs 169.20, marginally higher than Friday's closing price of Rs 168.55.

Boardroom debate The bank is planning a $150-200 million ADS to raise funds. UTI-I, which holds 33% in the bank, is against the move The bank may also raise funds through a preferential issue. This way, promoters can maintain their current shareholding