You are here: Home » Finance » News » Banks
Business Standard

Bank of Baroda to raise Rs 5,000 cr through bonds, employee stock option

The move comes a day after the public sector lender received capital infusion of Rs 7,000 crore from the Centre

Virendra Singh Rawat  |  Lucknow 

Bank of Baroda
Bank of Baroda is an Indian state-owned International banking and financial services company | Photo: Shutterstock

(BoB) was looking to raise around Rs 5,000 crore through bonds and employee stock option plan (ESOP) this month, informed BoB managing director and CEO P S Jayakumar. The move comes a day after the public sector lender received capital infusion of Rs 7,000 crore from the Centre.

While, Rs 4,000 crore of tier I capital is proposed to be raised by issuing bonds, the remaining Rs 1,000 crore to Rs 1,200 crore is expected to be mopped up from the ESOP route, depending upon the response from bank employees.

“After the ESOP scheme closes by the middle of October, the process of issuing bonds would be taken up,” Kumar told Business Standard. He said the Bank planned to wrap up the fresh capital raising exercise in the current quarter (Oct-Dec) even as he exuded confidence that it could even be completed by the end of this month itself.

Earlier, the Bank had planned to complete the process by the end of September, but the process eventually got delayed.

“Together with the capital infusion of Rs 7,000 crore by the central government, the Bank would get funds totalling Rs 12,000 crore to Rs 12,200 by the end of this quarter,” the BoB CEO said adding all regulatory approvals were already in place.

The union ministry had infused capital of Rs 7,000 crore in BoB by way of preferential allotment of equity shares (special securities/bonds) during the current financial year 2019-20.

has also signed an agreement with Agra-based non banking financial company (NBFC) Paisalo Digital Limited (PDL) for expanding its micro lending portfolio, especially focussing on women self help groups (SHG) in India.

Under the pact, the two financial entities would jointly reach out to prospective customers and conduct due diligence for extending small ticket loans in India with special focus on Uttar Pradesh.

Meanwhile, BoB will sign a memorandum of understanding (MoU) later this evening with the Yogi Adityanath government for facilitating loans under state’s flagship one district, one product (ODOP) scheme, which is aimed at promoting traditional and indigenous industries.

Meanwhile, Jayakumar said there was adequate liquidity in the market and the problem of non-performing assets (NPA) would soon bottom out from the Indian financial space.

First Published: Tue, October 01 2019. 17:28 IST
RECOMMENDED FOR YOU