DCB completes 1st Tranche of capital raising through private equity placement Qualified investors pick up 15% stake in DCB

Mumbai, February 10, 2006…. Development Credit Bank Ltd., one of India’s emerging private sector banks today announced that it has completed a private equity placement of Rs. 52 crores to HDFC Ltd, Khattar Holdings, and Amtel Finance. The qualified investors have picked up a 15% stake in DCB through preferential share issue and will step in as pure financial investors.

While commenting on the capital raising plans Nasser Munjee, Chairman - DCB said, “Over the past year, we have made significant progress towards reducing our overall costs to sustain our operations in this booming economic environment. By completing this transaction, we are complementing our ongoing cost cutting initiatives and increasing our financial flexibility. This will allow us to pursue aggressively opportunities that we believe will drive our growth over the next several years."

He further added that, “We are planning to raise substantial funds through an IPO to take advantage of the booming capital market. We are, at the present time, targeting to raise around Rs. 300 crores from the IPO. We are also likely to return much better performance targets to gain from the banking sector’s good prospects and pass on these benefits to our stakeholders.”

Mr. Yogesh Chadha, CFO, DCB said, “The capital raising plan would be in 2 Tranches. The 1st Tranche through the Private Equity route has been successfully completed. The funds raised will be utilised towards improving provision covers on NPAs (non Performing Assets) and increasing the balance sheet size. In the 2nd Tranche funds will be raised through the IPO. We will be filing the Draft Red Herring Prospectus very shortly.”

After the 1st Tranche, the holding of the Aga Khan Fund for Economic Development’s (AKFED), the principal promoters in the bank, which is currently at 69% will come down to 58%.

About Development Credit Bank Limited

Development Credit Bank Limited (DCB) is a Private Sector Scheduled commercial Bank in India having a network of 72 branches & extension counters spread over nine States and two Union Territories. As of March 31, 2005, DCB’s deposit base was INR 3,894 crores and the advances were over INR 2,001 crores.

The Bank is in the process of capital injection as it sees a very large potential for growth and value creation given the buoyant economy at the present time.