State-owned Central Bank of India plans to raise Rs 2,000-3,000 crore via equity in multiple tranches over the next two months, Managing Director & Chief Executive Officer Pallav Mohapatra said August 20.
The Mumbai-based lender had obtained shareholder approval to raise up to Rs 5,000 crore equity by way of follow-on public offer, rights issue or qualified insitutional placement (QIP) in the current financial year.
"We want to raise Rs 2,000-3,000 crore apart from whatever we get from the government," Mohapatra said, adding that the bank is hoping to receive capital infusion from the government by end of the second quarter.
The government has earmarked Rs 70,000 crore for recapitalisation of public sector banks in 2019-20. However, it has not made any allocations yet. The capital adequacy of most banks is under pressure due to higher provisioning against bad loans.
As on June 30, Central Bank's capital adequacy ratio stood at 9.58 percent, with Common Equity Tier-1 at 7.58 percent.
Mohapatra said the bank has set a target of around 10 percent for loan growth in the current financial year. He expects higher credit growth at 14-15 percent in segments like retail, agriculture and medium and small enterprises.
Mohapatra said the bank will be linking some of its retail loan portfolios to the Reserve Bank of India's repo rate for better transmission of monetary policy. The bank will introduce repo rate-linked retail loan products by next month, he said.
On August 19, RBI Governor Shaktikanta Das indicated the regulator may formalize external benchmarking of loans to ensure faster transmission of policy rate cuts.
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