State-owned Indian Overseas Bank has approached the government for an infusion of Rs 1,000 crore Tier-I capital to augment its capital base.
State-owned Indian Overseas Bank has approached the government for an infusion of Rs 1,000 crore Tier-I capital to augment its capital base.
"We have approached the government for a capital infusion of Rs 1,000 crore Tier-I capital," IOB Chairman and Managing Director, SA Bhatt, told reporters on the sidelines of a FICCI-IBA banking summit here on Wednesday.
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The infusion will help the bank to maintain a capital adequacy ratio of 12 per cent and a Tier-I capital ratio of eight per cent, Bhatt said. Three other public sector banks - Kolkata-based Uco Bank, Central Bank of India and Vijaya Bank - had received approval early this year for the infusion of Rs 3,800 crore government capital.
Bhatt said IOB expects Rs 60 crore non-interest income primarily from the sale of bank assurance products in FY10. The bank has targeted a loan growth of 20 per cent this year, he added.
The bank has restructured loans worth Rs 8,200 crore in the current fiscal out of which nearly Rs 2,000 crore has come from the textile and IT sectors, Bhatt said. However, given the adverse market conditions, the bank fears that nearly 5-10 per cent of the restructured loans may turn non-performing assets (NPAs), he said.
The IOB chief said lending rates had bottomed out in the industry and there was no further room for the bank to lower its deposit rates.
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