The board of Indian Overseas Bank (IOB) gave the nod to raise Rs 2,100 -crore capital by way of preferential allotment of equity shares to the Government of India, Life Insurance of India and its various schemes.
The decision allows the bank to raise the equity at a face value of Rs 10, with a premium on preferential basis and or QIP up to Rs 350 crore at a price as determined under the Sebi's regulations, not diluting below 65 per cent of the Government of India's holding. The IOB board met on December 14, 2013 to consider the proposal.
IOB said this was over and above the original approval accorded by the board at its meeting held on November 11, 2013, to raise capital to the extent of Rs 2,100 crore.
Earlier, IOB chairman and managing director M Narendra said with the 14 per cent credit growth, it would require around Rs 2,100-crore capital.
IOB is one of the 20 public sector banks in which the government has decided to infuse around Rs 14,000 crore in 2013-14, through preferential allotment of equity in its favour. The government's stake in IOB stands at 78.2 per cent.
It is one of the largest public sector banks in the country with a total business of over Rs 367,000 crore and has set a target to cross Rs 450,000 crore. Going forward, the bank is planning to give thrust to SMEs and retail lending.
IOB would be looking at increasing its market share from the current 2.75-2.8 per cent to 3.5 per cent in the future.
It is working at being the top five nationalised banks in terms of business volumes, said Narendra.
