State-owned lender Central Bank of India (CBI) is planning to raise capital up to Rs 5,000 crore in the financial year 2019-20 through various modes, including rights issue and FPO, to meet Basel III norms.
The bank will raise fund via follow-on public offer (FPO), rights issue or private placement including qualified institutions placements (QIP), subjected to shareholders approval in the ensuing annual general meeting to be held on June 28, CBI said in its annual report 2018-19.
"The capital would be raised in such a way that the Central government shall at all times hold not less than 51 per cent of the paid-up equity capital of the bank, whether at a discount or premium to the market price, in one or more tranches," it said.
As per Basel III regulations, the CBI is required to maintain minimum Common Equity Tier-1 (CET 1) ratio of 5.50 per cent plus Capital Conservation Buffer (CCB) of 2.50 per cent in the form of equity capital, Tier 1 ratio of 9.50 per cent and overall CRAR of 11.50 per cent by March 31, 2020.
The enhanced capital will be utilized for the general business purposes of the bank, the bank said in its annual report.
"The detailed terms and conditions for the issuance of the equity shares as and when made will be determined by the Board in consultation with the Merchant Bankers, Lead Managers, Advisors and such other authorities as may require to be considered by the Bank considering the prevailing market conditions and other relevant factors," it added.
During the financial year 2019-20, the bank had raised Rs 212.53 crore capital from the eligible employees under Employee Stock Purchase Scheme (ESPS).
The public sector lender had reported widening in its losses to Rs 2,477.41 crore during January-March quarter of fiscal 2018-19 due to high provisioning burden of Rs 4,734 crore. The bank had reported a loss of Rs 2,113.51 crore in the year ago period and a loss of Rs 718.23 crore for the third quarter ended December 2018.
In March quarter, total income increased to Rs 6,620.51 crore from Rs 6,301.50 crore in the year-ago quarter.
For the financial year 2018-19, the bank's net loss widened to Rs 5,641.48 crore, as against Rs 5,104.91 crore in the last fiscal. Income fell to Rs 25,051.51 crore in FY19 from Rs 26,657.86 crore in FY19.
Edited by Chitranjan Kumar