IOB to raise Rs 3,500 cr for expansion

Public sector Indian Overseas Bank (IOB) today said it would be raising around Rs 3,500 crore in core tier-I capital over the next three years to fund expansion.

Tier I capital is the core measure of a bank's financial strength from a regulator's point of view.

"We will be needing roughly Rs 1,200 crore per annum for the next three years given the expansion plans which we have drawn up," the Chennai-headquartered bank's executive director Nupur Mitra told reporters here.

IOB Chairman and Managing Director M Narendra said the bank had already written to the Centre, which owns a 66% stake, about its capital raising plan of up to Rs 1,400 crore for FY12.

"In our annual general meeting, we passed an enabling resolution to the money. We are yet to finalise the route which we would adopt like a follow-on offer, institutional placement etc," he said.

The bank's total capital adequacy as on June 30 stood at a comfortable 13.38%, and it is targeting a credit growth of up to 22% for the fiscal, Narendra added.