Central Bank of India To Raise Rs 400 Cr Tier II Capital

Central Bank of India is planning to raise Rs 400 Cr through a bond issue in the next two months. It is also expecting to receive Rs 700 Cr from the government as Tier I capital under the recapitalisation plan by March 31.

These funds will be used to meet capital adequacy and expansion requirements over the next few years.

Earlier in Feb'09, the cabinet had approved recapitalisation of three public sector banks - Uco Bank, Vijaya Bank and Central Bank of India, by infusing Rs 3,800 cr.

Under the plan, the government would infuse Rs 1,400 cr into the Central Bank of India while Vijaya Bank and Uco Bank would get Rs 1,200 cr each.

The infusion of fund will improve the financial health of the banks as their CAR will be raised more than desired level of 12 percent. The increase in CAR of the banks will also enable them to lend more money.

Central Bank of India is one of the oldest commercial bank in India and operates through a network of 3,168 branches and 270 extension counters across the country.

Earlier in Oct, SBI raised $750 mn in the overseas market through five year bonds as a part of its medium-term note programme.

Recently, Central Bank of India offered to buy out other shareholders in its home finance subsidiary, Centbank Home Finance, offering Rs 104.8 per share.

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