The state-run lender Bank of India has deferred its plan to raise capital through the QIP route as the government decides to infuse Rs 2,257 crore capital into the bank.
As reported to the PTI, BoI Managing Director Dinabandhu Mohapatra said, "We have postponed the QIP (Qualified Institutional Placement) as the government decided to infuse Rs 2,257 crore capital support into the bank obviating the need for the capital immediately".
The decision was taken before the prompt corrective action (PCA) was invoked against the bank by the RBI and not owing to it.
Since some positive developments were taking place on resolution of stressed assets under NCLT (National Company Law Tribunal) and the government had indicated more capital infusion, we decided to wait for the actual infusion on the book and then go to the market for QIP. This way we will get more value for our shares," he said.
Bank of India was brought in the Prompt Corrective Action framework by RBI after its books were inspected in March 2017.
Read about PCA by RBI against BOI and 10 other banks
The bank has now adopted an aggressive bad loan recovery model and expects to be soon out of RBI's watchlist.
In November last year, the bank through AT-1 bonds raised Rs. 500 crore. While it is also considering sell-off of some of its non-core assets to raise additional capital. The bank has already made a proposal to sell its complete stake in STCI Limited formerly referred as Securities Trading Corporation of India and the transaction is expected to be completed this fiscal.
With Inputs From PTI