Money & Banking

BOI defers ₹ 3,000 cr QIP-issue plan

K. R. Srivats New Delhi | Updated on January 13, 2018

Centre’s capital infusion and non-core assets sale to bolster capital position, says MD & CEO Mohapatra

Bank of India (BOI), a public sector bank, has deferred its earlier plan of Rs 3,000 crore capital raising through a qualified institutional placement (QIP) issue, a top official said.

This decision comes in the wake of BOI getting ₹ 2,257 crore capital support from the Government under the Indradhanush programme and the likely monetisation of certain non-core assets this fiscal, Dinabandhu Mohapatra, Managing Director & CEO, BOI told BusinessLine here.

It may be recalled that the QIP plan –which had Board approval—was announced in early December 2017 and much before the bank came under the RBI’s prompt corrective action.

“There is now no need to do a QIP this fiscal. The decision to drop the QIP plan has not been taken because of the PCA. It was taken before the PCA. Since some positive developments were taking place on resolution of stressed assets under NCLT and Government had indicated more capital infusion, we decided to see the Government infused capital in the book and then go to the market for QIP. This way we will get more value for our shares”, he said.

BOI had last tapped the market in November last year to raise ₹ 500 crore capital through AT-1 bonds.

BOI has already gone in for a Request for Proposal (RFP) for shedding its entire 29 per cent stake in STCI Finance as part of sale of its non-core assets. “We expect this transaction to happen this fiscal”

He also highlighted that BOI will also get a portion of the ₹ 1.35 lakh crore Recap bonds that are likely to be issued to banks.

“We are adequately capitalized now. We don’t immediately need capital from the market through a qualified institutional placement”, he said.

SERVICE CHARGES

Mohapatra asserted that BOI does not have any plan of levying charges on those services which are offered free right now.

He dismissed as “incorrect” the reports in section of media (social, print and visual media) that all free services of public sector banks including Bank of India will be charged from January 20 this year.

“Let me make it clear. There is no proposal on levy of charges on services that are currently rendered free”, Mohapatra said

Department of Financial Services (DFS) Secretary Rajiv Kumar on Friday took a video conference meeting with chief executives of PSBs to ensure that public sector banks don’t resort to levy of charges on services that are currently rendered free.

srivats.kr@thehindu.co.in

Published on January 13, 2018

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