The government has infused fresh capital of Rs 4,360 crore in the public sector Indian Overseas Bank (IOB) for meeting the regulatory norms, the bank announced in a regulatory filing to the stock exchanges on Saturday.
“The bank said it has received the amount as contribution of the government in preferential allotment of equity shares during the financial year 2019-20 as government’s investment,” the bank said in the regulatory filing.
In October last year, the Finance Ministry had announced capital infusion of Rs 3,800 crore which was later increased by Rs 560 crore.
In its second quarter results, the bank had reported net loss of ₹2,253.64 crore, compared with a net loss ₹487.26 crore a year earlier. It was then when its gross-performing assets fell to ₹28,673.95 crore compared with ₹37,109.96 crore, and net NPAs to ₹12,507.97 crore from ₹18,876.05 crore, reports stated.
Indian Overseas Bank is under the Prompt Corrective Action framework of the Reserve Bank of India.
The Prompt Corrective Action framework comes into action when the banks violate the three key regulatory points –capital to risk weighted assets ratio; net non-performing assets; and return on assets.
(With input from agencies)