BackIOB seeks Rs1,000 crore capital from government
IOB seeks Rs1,000 crore capital from government
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Mumbai: State-run Indian Overseas Bank has sought Rs1,000 crore of capital from the Union government to maintain its capital adequacy ratio at 12% for the next 3 years, a top official said on Wednesday.
The capital would also help the bank maintain its tier I capital adequacy ratio at 8%, S A Bhat, chairman and managing director, told reporters on the sidelines of a banking summit.
The lender has no immediate plans to raise further capital, Bhat said.
The south India-based bank has restructured loans worth Rs8,200 crore in the current calendar year, but expects 5-10% slippage in restructured assets, he said.
“I am afraid of loans given to textile sector and to IT parks," he said referring to loans recast for these sectors.
It also expects loan growth of 20% in the current fiscal with demand picking up as the busy seasons sets in end-September, Bhat said.
It is also looking at an income of Rs600 million from selling bank assurance products in the current financial year as compared to Rs250 million a year earlier.
The lender had been offering lower deposit rates to curb formation of excess liquidity in the wake of subdued credit demand, Bhat said.
“We were aligning our deposit mobilisation in a way that we don’t have excess liquidity."
He also said there was no room to cut deposit rates further as interest rates appear to have bottomed out.
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