Bank of India can raise Rs 7,000 cr from bonds: CMD

State-owned Bank of India today said it can raise up to Rs 7,000 crore from bonds to fund business growth.

"We have a headroom of about Rs 7,000 crore under tier II bonds," Bank of India Chairman and Managing Director Alok K Misra told reporters on the sidelines of a function to mark the 105th Foundation Day of the bank.

The funds would be raised when required, he said, adding that the bank recently raised Rs 320 crore from tier I bonds.

The bank expects a credit growth of 22 per cent and deposit growth of 20-21 per cent in the current fiscal, he said.
    
On the outlook for rates, he said interest rates are likely to remain stable in the near term.
    
Last month, the bank increased its Benchmark Prime Lending Rate (BPLR) by 50 basis points from 12 per cent to 12.5 per cent.
    
For the quarter ended June, 2010, Bank of India posted a 24.14 per cent rise in net profit to Rs 725.13 crore, although its bad loans went up substantially year-on-year.
    
The state-owned lender had reported a net profit of Rs 584 crore in the same period a year ago.
    
The bank's Net Interest Income improved by 34 per cent during the quarter to Rs 1,740 crore from Rs 1,301 crore in the year-ago period.
    
It witnessed a sharp rise in loan defaults in the June quarter, with net non-performing assets (NPAs) escalating to 1.18 per cent from 0.84 per cent during the same period last year.