Central Bank of India is planning to mobilise up to Rs 2,500 crore via qualified institutional placement (QIP) in the next few months.
This is in addition to the capital infusion of Rs 2,500 crore that the public sector bank has sought from the Government for the current financial year.
BK Divakara, Executive Director, said his bank requires Rs 2,500 crore to support the targeted credit growth of about 9.50 per cent in the current financial year.
The bank has appointed SBI Capital Markets, ICICI Securities and IDBI Capital Markets to pilot the QIP issue.
As per SEBI guidelines, the aggregate funds that a company, whose equity shares are listed on a stock exchange, can raise through QIPs in one financial year cannot exceed five times the net worth of the issuer at the end of its previous financial year.
A company which is complying with the prescribed requirements of minimum public shareholding of the listing agreement is eligible to raise funds in domestic market by placing securities with Qualified Institutional Buyers (QIBs).
Besides injecting capital based on key efficiency parameters, Divakara said the government is also considering need based capital infusion in public sector banks.
Last year, the government infused Rs 6,990 crore in nine public sector banks on the basis of new criteria - weighted average of return on assets for last three years and return on equity for the last financial year.
The banks that received capital were: State Bank of India (Rs 2,970 crore), Bank of Baroda (Rs 1,260 crore), Punjab National Bank (Rs 870 crore), Canara Bank (Rs 570 crore), Syndicate Bank (Rs 460 crore), Allahabad Bank (Rs 320 crore), Indian Bank (Rs 280 crore), Dena Bank (Rs 140 crore), and Andhra Bank (Rs 120 crore).
The government is now planning to recapitalise public sector banks to the tune of Rs 70,000 crore over a period of four years. The first instalment of Rs 25,000 crore has been marked for this fiscal.