IOB seeks Rs 1,000-crore capital infusion from govt

State-owned Indian Overseas Bank (IOB) has approached the government for an infusion of Rs 1,000-crore Tier-I capital to augment its capital-base, its Chairman said.        

"We have approached the government for a capital infusion of Rs 1,000-crore Tier-I capital," IOB Chairman and Managing Director, S A Bhatt, told reporters on the sidelines of a FICCI-IBA banking summit here today.        

This will help the bank to maintain a capital adequacy ratio of 12 per cent and a Tier-I capital ratio of eight per cent, Bhatt said.        

Three other public sector banks — Kolkata-based UCO Bank, Central Bank of India and Vijaya Bank, had received approval early this year for the infusion of Rs 3,800-crore government capital.         

The lender expects Rs 60-crore non-interest income primarily from the sale of bancassurance products in FY 10, he said.        

It has targeted a loan growth of 20 per cent this year, Bhatt said.

The bank has restructured Rs 8,200-crore worth loans in the current fiscal, out of which nearly 2,000-crore has come from the textile and IT sectors, Bhatt said.

However, given the adverse market conditions, the bank fears that nearly 5-10 per cent of the restructured loans may turn NPAs, he said.

Lending rates have bottomed out in the industry and there was no further room for the bank to lower its deposit rates, the IOB chief said.