BoI seeks Rs 4,000 cr from Centre

Bank of India (BoI) has sought capital infusion of Rs 4,000 crore from the government to fund its growth for the next two-three years. The government holds 65 per cent stake in Bank of India.

“We need Rs 4,000 crore over the next two-three years. Thus, we have requested the government for funds, so that the capital adequacy ratio remains above nine per cent,” said a senior Bank of India official. As on June 30, the bank’s capital adequacy ratio was 11.6 per cent, with Tier -I capital at 8.02 per cent. The government had said it wanted to ensure public sector banks remain well capitalised, with Tier-I capital of eight per cent. Banks have to maintain six per cent Tier-I capital and a minimum capital adequacy ratio of nine per cent.

“Although Tier-I capital has increased, we need more capital to sustain growth over the next few years,” the official said. “Bank of India has sought the government’s nod for a rights issue, fund raising through warrants or qualified institutional investors. We have given options to the government, in case the government is not able to provide the required amount,” he added. Six-seven banks had sought capital infusion from the finance ministry. While State Bank of India was in talks for a rights issue, the Centre has infused direct equity for others like IDBI Bank, Union Bank of India and Central Bank of India, among others.

Source: Business Standard