The government has increased the authorised capital of Indian Overseas Bank (IOB) by Rs 5,000 crore, enabling it to shore up its capital adequacy by issuing share capital.
The state-owned lender said that the government, after consulting the Reserve Bank of India, has increased its authorised capital from Rs 10,000 crore to Rs 15,000 crore.
"The increase in authorised capital will enable the Bank to take steps to shore up its capital adequacy by way of issue of share capital including in case of further capital infusion by the Government," it said.
Karnam Sekar, managing director and chief executive officer of IOB, has recently said the bank has sought Rs 6,000 crore funds from the government for the current fiscal. The Capital to Risk (Weighted) Assets Ratio (CRAR) of the Bank stood at 10.02 per cent during the quarter ended June, 2019.
According to stock exchange filings, the government held around 92.52 per cent stake in IOB in the quarter ended June 2019.
IOB's board of directors has approved issue of equity capital during 2019-20 to a maximum extent of 300 crore equity shares with appropriate premium by way of public issue, rights issue, shares to employees, preferential issue and Qualified Institutional Placement. It has received shareholders' approval for the same in its Annual General Meeting on July 10, 2019.