Public sector Bank of India is exploring the possibility of share sale to investors in the next one year to meet the requirement of minimum public shareholding of 25 per cent. Currently, the Government of India holds 81.41 per cent stake in the Mumbai-based bank. “We are exploring options to meet Sebi’s minimum public shareholding requirement. However, the decision to sell shares will depend on market conditions,” Bank of India Managing Director Rajneesh Karnataka told PTI.
He said public sector banks have time till August 2024 to meet the Securities and Exchange Board of India (SEBI) requirement. After the share-sale, the Government of India’s stake will come down to below 75 per cent, on a volume basis.
With regard to the bank’s growth, he said, credit growth is expected to be 11-12 per cent during the current financial year with the help of retail, MSME and agriculture loans. “As far as deposits are concerned, we expect a 10 per cent growth on the liability side during the current financial year,” he added.
Asked about the bank’s resource raising plans, he said, the bank’s capital adequacy ratio as on March 2023 was 16.28 per cent and it should be sufficient to take into account the loan growth during the year. However, the board has given approval to raise capital up to Rs 6,500 crore through bonds in FY2024.
As per the Board approval, the bank may raise up to Rs.4,500 crore through follow-on public offer/qualified institutional placement/rights issue/preferential issue and/or Basel III compliant additional tier-1 (AT-1) bonds, while the remaining Rs. . 2,000 crore through Basel III compliant Tier-2 bonds in one or more tranches. This will be done when the need arises and the market conditions are favourable, he added.
Karnataka while addressing a town hall meeting here on Wednesday asked officers and employees to focus on current account savings account (CASA) mobilization and increase non-interest income.
He added that the bank is working towards aligning its IT and digital banking products to keep pace with digitization and enhanced customer experience. Karnataka, in the presence of field general manager Prashant Thapliyal and head government business DS Shekhawat, said that each employee should focus on customer satisfaction and improving efficiency.