The Indian Overseas Bank (IOB) has got shareholder approval to raise a little over Rs 400 crore. The bank has various options including Qualified Institutional Placement (QIP) route to raise the money, said the bank's chairman and managing director.
M Narendra, CMD, IOB, said, "We got approval for the enabling resolution which will be used in case of an immediate requirement in case the proposed capital infusion from the Government of India is delayed."
The bank will issue over 4 million equity shares of a face value of Rs 10 each, aggregating not more than Rs 401.79 crore through options including QIP, private placement, rights issue among others.
It may be noted that last fiscal the bank raised around Rs 1,441 crore from the central government and around Rs 302.63 crore from the Life Insurance Corporation (LIC) through a preferential allotment of equity shares. It expects a similar amount of funds this year too.
Earlier, the bank said that it would have additional capital requirements of around Rs 9,500 crore till 2017-18 to maintain the capital adequacy ratio (CAR) as per the Basel-II international accounting standards, which according to the Reserve Bank of India (RBI), would come into effect from January 1, 2013. The estimation is based on assumption that the credit rate would be at 20 per cent.
"Overall, we are looking at a growth of around 20 per cent this fiscal, ie, a total business of Rs 3.85-4 lakh crore."
The bank closed fiscal-ended March 31, 2012, with a business of around Rs 3.22 lakh crore, an increase of around 24.20 per cent compared to same period last year.
Narendra said, "We expect the market conditions to improve in next three months, and hence we would be growing at 20 per cent this year." The bank would also have product-specific campaigns to improve its retail lending portfolio. It plans to recruit around 1,500 probationary officers, 578 specialists and 1,500 clerks to take care of the business expansions planned for the year.
Commenting on the bank's NPA, he said, "We have made significant cash recoveries and upgrades of NPA accounts during the year which stood at Rs 1,188 crore as of March 31, 2012." The bank has 16 Asset Recovery Management branches which exclusively focuses on recovery in NPA accounts.
Last year, it recovered around Rs 400 crore and it is expecting recovery on similar lines during the present fiscal year too.
On the expansion, he said, the bank will add around 400 branches this year to take the number of branches to around 3,000 and another 1,500 ATMs would be added, increasing the number of ATMs to 3,000, he said.
Besides, the bank plans to open more regional offices to have an optimum size of branch network for efficient monitoring. It would also open 12 processing centres for small and medium entrepreneurs (SMEs) and design and implement a simplified application-cum-appraisal for micro and small sector loans, with additional provisions of online application.