Indian Overseas Bank gets nod to raise Rs 1,551 crore from GoI

Indian Overseas Bank (IOB) has received approval from shareholders to raise Rs 1,551 crore from the Government of India (GoI). The shareholders has approved allotment of up to 55,57,14,797 shares to the Government, which in turn will infuse Rs 1,551 crore on preferential basis.

The central government has recently announced an allocation of Rs 3,101 crore into the bank by way of preferential allotment of equity, which is struggling with high non-performing assets (NPA). Almost 50 per cent of this amount, Rs 1,551 crore, is marked for immediate infusion, which would help the Bank to keep its capital adequacy ratio within the limits.

The bank has reported a net loss of Rs 1450.50 crore for the quarter ended June 30, 2016 as compared to a net profit of Rs 14.76 crore for the same quarter in the previous year. Total income of the bank decreased by 12.05% to Rs 5868.44 crore for the quarter under review, from Rs 6672.11 crore for the corresponding quarter of the previous year.