Bank of India plans share sale to meet Sebi’s minimum public holding norms

The state-owned Bank of India is exploring the possibility of selling the shares to investors over the next year to meet the minimum public ownership requirement of 25 percent.

Currently, the Government of India holds an 81.41 percent stake in the Mumbai-based bank.

“We are exploring options to meet SEBI’s minimum public ownership requirements. However, the decision to sell the shares will depend on market conditions,” Bank of India managing director Rajneesh Karnatak told PTI.

He said public sector banks have plenty of time until August 2024 to meet the requirements of the Securities and Exchange Board of India (SEBI).

After the shares are sold, depending on the quantity, the ownership of the Government of India will fall below 75 per cent.

Regarding the bank’s growth, he said, credit growth is expected to range between 11 and 12 percent during the current fiscal year, supported by retail loans, micro, small and medium loans, and agriculture.

As far as deposits are concerned, he said, “We hope to increase the liability side by 10 percent during the current fiscal year.”

In response to a question about the bank’s resource mobilization plan, he said that the bank’s capital adequacy ratio reached 16.28 percent in March 2023 and this should be enough to take care of loan growth during the year.

However, the Board of Directors has given its approval to raise the capital amounting to Rs. 6,500 crore in FY24 through debentures.

Subject to Board approval, the bank can raise up to Rs 4,500 crore from a follow-on public offer/qualified institutional placement/rights issue/preferential issue and/or additional Basel III compliant Tier 1 (AT-1) notes while remaining Rs. 2,000 crore via Basel III compliant Tier 2 bonds in one or more tranches.

He added that this will be done when needed and when market conditions are favorable.

Karnataka while addressing the City Council here on Wednesday asked the officers and staff to focus on mobilizing the Current Savings Account (CASA) and increasing non-interest income.

He said that the bank is working to align its information technology products and digital banking services to keep pace with digitization and improve customer experience.

Karnatak, in the presence of Field General Manager Prashant Thappial and Head of Government Business DS Shekhawat, said that every employee should focus on customer satisfaction and improve efficiency.