IOB gets shareholders nod to raise Rs 1,200 crore through QIP

To focus on reduction of NPA, implementation of multi pronged strategy to improve profitability

Indian Overseas Bank has received shareholders' approval to raise capital up to Rs 1,200 crore by way of Qualified Institutional Placement (QIP).

As reported earlier, the proposed fund raising is in view of certain expansion plans of the Bank, the implementation of Basel III norms, and consequent capital charge and there is a need to increase the capital to further strengthen the Capital Adequacy Ratio, according to the Bank officials.

The Bank today announced that the in its Annual General Meeting, the shareholders approved the proposal for raising of capital by way of QIP up to Rs 1200 crore including share premium subject to regulatory approvals.

It also added that M Narendra, chairman and managing director of the Bank, also said that there will be increased attention on reduction of NPAs through intensive recovery measures throughout the year and ensuring maintenance of asset quality. It would also focus on implementation of a multi pronged strategy to improve profitability under increased retail composition, maintaining higher incremental average CD ratio, high yielding advances and focus on credit monitoring.

As reported earlier, the Capital Adequacy Ratio (CAR) of the Bank as on March 31, 2014, as per Basel III is 10.78 per cent, well above the nine per cent stipulated by the Reserve Bank of India (RBI). However in view of certain expansion plans of the Bank, the implementation of Basel III norms, and consequent capital charge, there is a need to increase the capital to further strengthen the CAR.

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