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OBC may mop up Rs 500 crore

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Our Bureau Chennai
Last Updated : Feb 06 2013 | 6:11 AM IST
Bank looking at a suitable interest rate to raise tier-II capital.
 
Oriental Bank of Commerce (OBC) expects to raise Rs 500 crore tier II capital by the end of February.
 
On the sidelines of the bank's tie-up with Franklin Templeton to sell mutual fund products K N Prithviraj, chairman and managing director, Oriental Bank of Commerce, said, "We are looking at a suitable interest rate to raise the tier II capital, which is expected to happen during the end of January or February."
 
The board of directors has given its approval. Prithviraj said though there is no urgent need for capital at present, he expects the interest rates to firm up, and raising of the tier II capital will, then, enable the bank to access funds.
 
The capital adequacy ratio of the bank was 13.68 per cent on September 30, 2005.
 
"We are focusing on recovery and, in this regard, filed FIRs with the Central Bureau of Investigation on 26 cases involving 50 accounts amounting to about Rs 780 crore. This has put pressures on debtors to come forward for one-time settlement," he said.
 
During the current financial year, the bank has recovered bad debt worth about Rs 480 crore, of which Rs 150 crore was with Global Trust Bank (GTB).
 
Prithviraj said if OBC continues to see profits at the same level, it will be able to wipe out its losses of Rs 1,300 crore, which it incurred through the GTB merger, in three years, against the earlier target of five years.
 
The bank purchased standard assets worth Rs 400 crore from ICICI Bank and Rs 200 crore from HDFC Bank. He said these assets are home and auto loans, bought during December 2005 to meet priority sector lending.
 
We expect to close the current fiscal with a total business of Rs 90,000 crore, of which advance will be Rs 35,000 and the rest deposits, he added.

 

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First Published: Jan 06 2006 | 12:00 AM IST

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