IDBI Bank hopes to get Rs 8,000 cr of fresh capital

State-owned IDBI Bank hopes the government will give Rs 7500-8000 crore of the bank’s total requirement of Rs 15,000 crore of fresh capital over the next three years, Chairman and Managing Director, Yogesh Agarwal said today.

Agarwal also said that he preferred to raise capital through an rights issue of shares. The bank is set to raise $225 million through a syndicated loan at a rate of 200-250 basis points above LIBOR.

The bank also has plans to raise funds through medium-term-notes, which will be issued during December-January once its Dubai branch is opened, Agarwal said.

He added the banks’ provision coverage ratio norms set by the Reserve Bank of India (RBI) were “stiff” and he expects some modification in them. RBI, in its mid-term review of 2009-10 (April-March) Annual Policy Statement, had advised banks to raise provision coverage ratio to at least 70 per cent. At 1216 IST, IDBI Bank share was trading at Rs 124.25 on the National

Stock Exchange, down 1 per cent from its previous close.