Industry

Indian Overseas Bank to get ₹4,360 crore in fresh capital

Karnam Sekar.

Karnam Sekar.  

With second tranche of infusion, Centre’s stake to cross 95%

The Centre will infuse fresh capital of ₹4,360 crore in the loss-making Indian Overseas Bank.

The bank said this would be the second tranche of fund infusion from the Centre. With this, the Centre’s stake in IOB is set to cross the 95%-mark, said a senior official.

In a regulatory filing, IOB said the Centre had issued a letter sanctioning ₹4,360 crore. The amount will be treated as the Centre’s contribution in the preferential allotment of equity shares (special securities/bonds) of IOB for the financial year 2019-20 as government’s investment. Currently, the Centre holds 94.56% stake.

It rose from 92.52% after the capital infusion of ₹3,857 crore it had received in October 2019. For the second quarter, IOB had reported net loss of ₹2,253.64 crore, compared with a net loss ₹487.26 crore a year earlier, following a rise in operating expenses as well as provisions.

The gross non-performing assets of the bank came down to ₹28,673.95 crore compared with ₹37,109.96 crore, and net NPAs to ₹12,507.97 crore from ₹18,876.05 crore.

Karnam Sekar, MD and CEO, had said the bank was on track to come out of the Reserve Bank of India’s prompt corrective action framework by March 2020.

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Printable version | Feb 28, 2020 6:46:00 PM | https://www.thehindu.com/business/Industry/indian-overseas-bank-to-get-4360-crore-in-fresh-capital/article30415333.ece

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