To raise Rs 2000cr tier II capital; no QIP: Central Bank

Central Bank of India will be tier II capital of Rs 2,000 crore in addition to Rs 1,800 crore infusion from the government ED RK Goyal told CNBC-TV18 in an interview. With this, the bank’s capital to risk assets ratio will be more than 13 percen and post infusion, government' stake holding in the bank will increase to 89 percent from current 85 percent, he adds.

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Below is the verbatim transcript of RK Goyal's interview on CNBC-TV18

Q: Can you take us through capital raising. We understand that will be to the extent of Rs 1,800 crore. Is the entire amount coming from the government and will you be doing any qualified institutional placement (QIP) issue besides this?

A: We already have communication from the Government of India and we are taking various steps so that the money reaches in our account at the earliest.

As far as QIP is concerned, this year we are not doing QIP. We are in the market to raise tier II capital. However, tier II capital of Rs 2,000 crore and Rs 1,800 crore from the Government of India, our capital to risk assets ratio (CRAR) should be more than 13 percent. We will be comfortable as far as this year is concerned.

Q: This Rs 1,800 crore is coming when. What will it mean in terms of increase in the number of shares and your capital?

A: The Government of India is already holding 85 percent in Central Bank of India and with Rs 1,800 crore government’s share will go up to 89 percent. We are expecting this money will reach by second week of January or it may come in last week of December also.

Q: What about your capital adequacy ratio. Where does it stand at now and how will it move post this fund raising?

A: As of today it is around 11.40 percent and with Rs 1,800 crore coming from the Government of India and around Rs 2,000 crore which we are going to raise as tier II capital, of course this year we need to factor profit or whatsoever it will be in the current financial year. The capital adequacy ratio at the end of this financial year should be around 13 percent plus.