Indian Overseas Bank to raise about Rs 19.77 bln via pref share issue to govt, LIC

New Delhi: State-run lender Indian Overseas Bank Wednesday said it plans to raise around Rs 19.77 billion via preferential allotment of equity shares to the government and the country's largest life insurer Life Insurance Corp of India (LIC).

A decision to this effect was approved by the bank's committee of directors in a meeting held earlier Tuesday, Indian Overseas Bank said in a statement filed with the stock exchanges.

Accordingly, the bank will issue 171.23 million equity shares to the government and 30.93 million equity shares to LIC at Rs 97.82 apiece, it said.

Shares of Indian Overseas Bank ended at Rs 106.85 on the Bombay Stock Exchange (BSE) today, down 2.78% from the previous close.

Recently, Finance Minister Pranab Mukherjee affirmed that the government is committed to adequately capitalize public sector banks in compliance with Basel III norms, which envisage more strict regulations for capital adequacy.

Basel III norms seek to create uniform standards for regulating banks across the globe by defining minimum capital adequacy and liquidity limits, among many other aspects, written by the Bank of International Settlement's Committee on Banking Supervision (BCBS).

The government is expected to infuse a total of Rs 150-160 billion into select state-run banks in the current financial year 2011-12 to shore up their tier-I capital adequacy ratio to 8%.

Recently, India's largest lender State Bank of India (SBI) announced that the government will infuse about Rs 79 billion into the bank via a similar route.

Other public sector lenders like Punjab National Bank, Union Bank of India and Bank of Maharashtra are also in the fray for capital infusions by the end of this fiscal year.

RELATED COMPANIES

Indian Overseas Bank

Indian Overseas Bank is an India-based company. The company was established in 1937. It is a government-controlled financial services company providing banking services. Indian Overseas Bank has ...

Read More..

RELATED STORIES

• Indian Overseas Bank gets shareholders' OK to raise Rs 19.77 bln via pref share issue to govt, LIC
• IDBI Bank board OKs Rs 53 bln pref share issue to govt, LIC
• Bank of Maharashtra to raise about Rs 10 bln via pref share issue to govt, LIC
• Punjab National Bank to raise about Rs 28.64 bln via pref share issue to govt, LIC
• UCO Bank board OKs pref issue of 31.37 mln shares to Life Insurance Corp