BoI plans Rs 100 crore issue to align with Basle II norms

Bank of India (BoI), in a bid to firm up its capital base in the wake of the Basle II norms, has decided to raise Rs 100 crore by issuing 10 crore equity shares of Rs 10 each.

The bank also sought shareholders' approval at its annual general meeting held on Wednesday, the bank said a notice to the BSE today. While this will be the second public issue for the bank, it is yet to finalise the timing and other details of the issue.

According to bank officials, the new Basle norms will be applicable from 2006 and one has to prepare to meet the capital charge on the market risk as required by the norms of the Reserve Bank of India.

As per an estimate made by the bank, the new norms will reduce its capital adequacy by 1.5 per cent, thus bring it down from 13 per cent to 11.5 per cent.

"We will wait for the right time to hit the market as currently the conditions are bit subdued," said an official.

Moreover, the bank is also planning to raise around Rs 300 crore as part of subordinate debt in the form of 10-year tier II bonds, the banker said.

Meanwhile, BoI has also come out with the gold card scheme for exporters today. Alok Mishra, general manager (international), BoI, said the scheme is being is aimed at recognising exporters as a privileged customer of the bank.

Under the scheme, exporters will have assured credit limits for three years with facility of 10 per cent of the ad hoc limit if they want. The facility will be offered at all branches of the bank in India and abroad.