IOB to issue shares to GoI on preferential basis

Move follows finance ministry's decision to infuse capital funds to the extent of Rs 2,009 crore in the bank

Indian Overseas Bank (IOB) informed BSE that its board meeting held on Saturday has sought shareholders' approval for issue of the bank's equity shares on preferential basis to the Government of India to the tune of Rs 2,009 crore, including premium.

The decision comes after the Department of Financial Services, under the Union Ministry of Finance has conveyed its decision to infuse capital funds to the extent of Rs 2,009 crore into the bank and advised IOB to take all preparatory steps for this.

The board approved to constitute a committee of directors for the preferential issue delegating powers to fix the issue price of shares as per the regulation and determine the number of shares to be issued. An Extraordinary General Meeting (EGM) of shareholders of the bank on September 23, 2015 at Chennai to obtain approval from the shareholders.