New Delhi: On Monday, Indian Bank had a board meeting to discuss matters related to higher provisions. The outcome of the meeting was to come to a decision to raise Rs. 5000 crore via bonds for its business growth.
The decision of raising money took place in its board funds meeting happened on Monday as Indian Bank failed to meet set target growth and was unable to meet regulatory capital requirements due to limited flow of cash.
Considering the current market situation amid Covid 19 pandemic – Limited flow of cash and amplified outflow of cash resulting in Indian bank just like any other bank running short of cash. COVID also impacted national banks along with state-owned banks.
What Does Indian Bank Official say in a Statement?
India Bank said in a regulatory filing, ” The Board of Directors approved the fundraising of Rs. 5000 crore through Basel III compliant tier-1 or tier-2 bonds. This would be done in one or more tranches in the current or following financial years as per the financial requirement.
Indian Bank reported last week about a net loss of Rs. 217.74 crore due to higher provisions for the Q1 Quarter (March quarter of 2019-2020).
Why Indian Bank Plans To Raise Funds?
Indian bank plan to raise funds through bonds is to support business growth and ensure of keeping adequate capital to perform day to day business operations.
The bank is also constructing solid ground for the likely spurt of non-performing assets and customer defaults towards the EMI moratorium lifted towards the end of August 2020.
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