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Indian Overseas Bank gets Rs 4,360-cr capital infusion from the govt

Indian Overseas Bank (IOB) on Saturday said that it has received a capital infusion of Rs 4,360 crore from the government

Indian Overseas Bank gets Rs 4,360-cr capital infusion from the govt
Indian Overseas Bank gets Rs 4,360-cr capital infusion from the govt

New Delhi: To boot lending and improve liquidity situation, Union Finance Minister Nirmala Sitaraman had announced an upfront capital infusion of Rs 70,000 crore for Public Sector Banks (PSBs) in August 2019. In line with the plan, state-run Indian Overseas Bank (IOB) has received a capital infusion of Rs 4,360 crore from the government, the bank said in a regulatory filing on Saturday.

"With reference to our letter reference No. IRC/271/2019-20 dated 27.12.2019, we wish to inform that the Bank has received an amount of Rs 4360 crore today towards the contribution of the Central Government in the preferential allotment of equity shores (Special Securities/Bonds) of the Bank during the financial year 2019-20 as government's investment," the bank stated. In a statement in December last year, the bank had said that it would get fresh capital from the government in the current Financial Year.

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In 2019, the government had announced capital infusion of Rs 3,800 crore and had later increased it by Rs 560 crore. Indian Overseas Bank is under the Prompt Corrective Action framework of the Reserve Bank of India. The bank had posted a net loss of Rs 2,253.64 crore for the quarter ended on September 30, 2019. The Prompt Corrective Action framework comes into force when banks breach the three key regulatory points namely capital to risk-weighted assets ratio, net non-performing assets and return on assets.

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