STOCK MARKET BSE NSE

Government ups capital infusion in Indian Overseas Bank to Rs 4,360 crore

Besides, the government has approved infusion of Rs 2,142 crore in UCO Bank in line with what was announced in August this year.

Published: 27th December 2019 03:19 PM  |   Last Updated: 27th December 2019 03:19 PM   |  A+A-

Indian Overseas Bank. (File Photo)

By PTI

NEW DELHI: Indian Overseas Bank (IOB) on Friday said it will get a fresh capital infusion of Rs 4,360 crore from the government in the current financial year for meeting the regulatory requirement.

In August, the finance ministry had announced a capital infusion of Rs 3,800 crore in the state-owned lender. This has now been increased by Rs 560 crore.

"The Bank has received vide letter dated December 25, 2019, for release of Rs 4,360 crore towards the contribution of the central government in the preferential allotment of equity shares (Special Securities/Bonds) of the Bank during 2019-20 as Government's investment," IOB said in a BSE filing.

ALSO READ: Allahabad Bank gets fresh capital of Rs 2,153 crore from government; shares jump 11 per cent

Besides, the government has approved infusion of Rs 2,142 crore in UCO Bank in line with what was announced in August this year.

Both the lenders are under the Prompt Corrective Action (PCA) framework of the Reserve Bank. IOB has reported widening of net loss to Rs 2,253.64 crore for the quarter ended September 30, 2019.

The bank had registered a loss of Rs 487.26 crore in the year-ago period. In the June quarter of the current financial year, it had posted a loss of Rs 342 crore. IOB's gross non-performing assets stood at 20 per cent (Rs 28,673.95 crore) of gross advances during the September quarter, compared with 24.73 per cent (Rs 37,109.96 crore) in the year-ago same period.

Net NPAs during the quarter stood at 9.84 per cent as against 14.34 per cent in the year-ago period. The Net NPA level is higher than the RBI's comfortable level of 6 per cent.

The PCA framework kicks in when banks breach any of the three key regulatory trigger points namely capital to risk-weighted assets ratio, net non-performing assets (NPA) and return on assets (RoA).



Comments

Disclaimer : We respect your thoughts and views! But we need to be judicious while moderating your comments. All the comments will be moderated by the newindianexpress.com editorial. Abstain from posting comments that are obscene, defamatory or inflammatory, and do not indulge in personal attacks. Try to avoid outside hyperlinks inside the comment. Help us delete comments that do not follow these guidelines.

The views expressed in comments published on newindianexpress.com are those of the comment writers alone. They do not represent the views or opinions of newindianexpress.com or its staff, nor do they represent the views or opinions of The New Indian Express Group, or any entity of, or affiliated with, The New Indian Express Group. newindianexpress.com reserves the right to take any or all comments down at any time.

flipboard facebook twitter whatsapp