Indian Overseas Bank receives Rs 4,360-cr capital infusion from govt

Chennai: Public sector Indian Overseas Bank has received capital infusion of Rs 4,360 crore from the government of India, the bank said on Saturday.

In a regulatory filing to the stock exchanges, the bank said it has received the amount as a contribution of the government in the preferential allotment of equity shares during the financial year 2019-20 as government’s investment.

In December 2019, the bank had said it would receive a capital infusion of Rs 4,360 crore from the government in the current financial year for meeting the regulatory requirement.

In August 2019, the Finance Ministry had announced capital infusion of Rs 3,800 crore which was later increased by Rs 560 crore.

Indian Overseas Bank is under the Prompt Corrective Action framework of the Reserve Bank of India.

The bank has reported widening of net loss to Rs 2,253.64 crore for the quarter ending September 30, 2019.

The Prompt Corrective Action framework comes into force when banks breach the three key regulatory points namely capital to risk-weighted assets ratio, net non-performing assets and return on assets.