BoI plans to Rs 500 cr tier-II cap

Bank of India (BoI) plans to open five new foreign offices and raise Rs 500 crore Tier-II capital to improve its capital adequacy ratio (CAR).

The bank, having 24 foreign offices in 12 countries, has decided to open offices in Belgium, China, Vietnam, Tanzania and Qatar, said M Balachandran, chairman.

"RBI and the government have approved the ventures, while foreign regulators of the respective countries are yet to give us the green signal," he said.

"We are spotting places where foreign trade with India has been gaining ground over the years and the bank would target the Indian population in these countries," he added.

BoI is also planning a new office in Bangladesh and wants to reopen its defunct Karachi branch in Pakistan. Meanwhile, the bank, which witnessed a decline in CAR from 11.3 per cent last fiscal to 10.5 per cent in June 2005, has decided to raise Tier-II capital which would range between Rs 300 crore and Rs 500 crore. This would help the bank improve its capital adequacy by 0.5 per cent.

"We would be raising the amount soon. BoI also has a mandate for raising Rs 100 crore Tier-I capital, but we are waiting to see if it will be required at all as our CAR position is quite comfortable," the CMD said.

About business growth, Balachandran said BoI expected its business to grow from Rs 1,31,000 crore in 2004-5 to Rs 1,65,000 crore this fiscal, with a 20 per cent growth in credit.