State-owned Bank of India is considering a share sale to investors within the next year in order to meet the minimum public holding requirement of 25%. Currently, the Government of India holds 81.41% stake in the Mumbai-based bank. Bank of India Managing Director Rajneesh Karnatak stated, “We are exploring options to meet Sebi’s minimum public holding requirement. However, the decision to sell shares would depend on market conditions.”
Public sector banks have until August 2024 to meet the Securities and Exchange Board of India (Sebi) requirement, according to Karnatak. After the share sale, the Government of India’s stake will fall below 75% depending on the amount sold.
Karnatak expects credit growth to be around 11-12% in the current financial year, driven by retail, MSME, and agriculture loans. In terms of deposits, he hopes to increase the liability side by 10% during the current financial year.
In regards to the bank’s resource mobilisation plan, Karnatak stated that the bank’s Capital Adequacy Ratio stood at 16.28% in March 2023, which should be sufficient to accommodate loan growth throughout the year. However, the board has approved raising capital of up to Rs 6,500 crore in FY24 through bonds.
According to the board approval, the bank can raise up to Rs 4,500 crore from follow-on public offer/qualified institutional placement/rights issue/preferential issue and/or Basel III compliant additional tier-1 (AT-1) bonds, with the remaining Rs 2,000 crore from Basel III compliant Tier-2 bonds in one or more tranches. This will be done as needed and depending on market conditions.
During a town hall meeting, Karnatak urged officers and staff to focus on Current Account Savings Account (CASA) mobilisation and increasing non-interest income. He emphasized the bank’s efforts to align its IT and digital banking products with digitalisation and enhance customer experience. Karnatak stressed the importance of customer satisfaction and improving efficiency to all employees.
Latest Business News
Denial of responsibility! SamacharCentrl is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
Omprakash Tiwary is a business writer who delves into the intricacies of the corporate world. With a focus on finance and economic landscape. He offers readers valuable insights into market trends, entrepreneurship, and economic developments.
