Indian Overseas Bank seeks Rs 2,100 crore from govt
Indian Oversea Bank (IOB) has sought capital support of Rs 2,100 crore from the government for enhancing its capital base.
New Delhi: Indian Oversea Bank (IOB) has sought capital support of Rs 2,100 crore from the government for enhancing its capital base.
"We have requested government to infuse Rs 2,100 crore so that our Tier I capital reaches 8 percent," IOB Chairman and Managing Director M Narendra said.
Tier I capital or the equity capital of the bank stood at 7.80 percent at the end of March 2013, he said.
As of March 2013, the total capital funds of the bank stood at Rs 18,366 crore due to allotment of preferential shares to the government of India.
The bank got Rs 1,000 crore from the government last fiscal as part of recapitalisation package.
Earlier this year, Finance Minister P Chidambaram had said all public sector banks are meeting Basel III requirements for capitalisation, though four of them -- Indian Overseas Bank, IDBI Bank, Bank of Maharashtra and Dena Bank -- have Tier-1 capital below 8 percent.
The government will take steps to ensure that these banks have 8 percent Tier-1 capital by the end of the current fiscal year, Chidambaram had said.
Other lenders like Punjab National Bank have sought Rs 1,500 crore capital infusion by the government while Chennai-based Canara Bank has sought Rs 1,000 crore during the current fiscal.
In the Budget speech, Chidambaram had said: "Before the end of March 2013, we should provide Rs 12,517 crore to infuse additional capital into 13 public sector banks. In 2013-14, I propose to provide a further amount of Rs 14,000 crore for capital infusion."
"We should ensure that public sector banks always meet Basel III regulations as they come into force in a phased manner," he had said.
Implementation of Basel III capital regulations envisage enhancing requirement of core equity capital by banks due to higher capital ratios. The Basel III capital ratios will be fully phased in as on March 31, 2018.
The government had infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.