Money & Banking

Oriental Bank hopes to get Rs 1,000-cr capital infusion

Anjana Chandramouly Bangalore | Updated on February 27, 2011

Mr S. C. Sinha

Oriental Bank of Commerce expects capital infusion of about Rs 1,000 crore during the next quarter, according to a top official of the bank.

“We have requested the government for a capital infusion of Rs 1,000 crore, and we expect it some time during the next quarter. This additional capital will help make our balance sheet stronger and also help meet future credit expansion,” Mr S.C. Sinha, Executive Director, Oriental Bank of Commerce, told Business Line. However, he said, the bank is already adequately capitalised now. The nature of capital infusion — preferential or equity — would be decided by the government, he said.

As of December 2010, the bank's capital adequacy ratio stood at 12.3 per cent, with tier-I capital at 9.09 per cent. “Profits of the current year have not been added, and at the end of the fiscal, about Rs 1,000-1,200 crore would be added,” he said. This would take care of the credit requirements of 2011-12.

The bank expects credit growth of 18 per cent by fiscal-end, and hopes to grow its credit book by 20-22 per cent next year, said Mr Sinha. There is a huge demand for credit from the infrastructure sector, mainly driven by the power sector.

Though the internal limit to exposure to this sector is at 17 per cent of the total loan portfolio, he said the bank would like to maintain lending to infrastructure sector at 10-12 per cent. He added that credit demand from the manufacturing sector has started picking up and expected growth in this segment during the next year.

Published on February 27, 2011

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