Central Bank of India seems well set to raise Rs 2,500 crore in tier-I

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capital in this financial year, Central Bank CMD S Sridhar disclosed this on the sidelines of a Ficci-organised Banking Conclave.

At the beginning of the financial year, the bank had Rs 250 crore in tier-I capital. This was in the form of innovative perpetual debt bonds (IPDI). Now, the proposed capital raising will push up the bank’s tier-I capital to 8 per cent from present 6.4 per cent. “Our evaluation suggests that to support 25 per cent growth in loan assets, we will need fresh capital of about Rs 2,500 crore as tier-I capital,” Sridhar said.

Following these capital infusions by the end of this financial year, the bank expects its capital adequacy ratio (CAR) to hit 13 per cent. Incidentally, the bank had reported CAR of 12.24 per cent on March 31.

Responding to queries on the bank’s overall performance in Q1, he said, “Credit offtake has not been that high as expected. But it was reasonably good. It will be in the region of 20 per cent. Deposit growth is about double digit.” Also, he said the bank is applying to RBI for overseas branches. “Hopefully, that will happen this year,” he said.