State-run Indian Overseas Bank (IOB) is planning to raise $500 million through the issue of medium term notes (MTNs) in 3-6 months, Chairman and Managing Director M. Narendra said Thursday.
“A number of Indian corporates need funds for their overseas operations. The amount raised through the MTN issue will be lent as medium term loans (5-6 years) to these corporates,” Narendra told reporters on the sidelines of a banking conclave organised by FICCI here.
This apart, the bank will also require capital of Rs.15 billion (Rs.1,500 crore) to fund this year’s growth needs.
The fund would be raised partly through ploughing back of profits and partly by way of government funding.
Narendra said the bank would formulate an estimate of funds required and submit it to the central government.
“We have to formulate an estimate of our fund requirement, based on the business plan, estimated profits level and possibility of recovery of bad debts, and submit it to the government for its consideration,” he added.
The bank, whose capital adequacy ratio stood at 13.32 percent as on March 31, 2012, had received Rs 14.40 billion (Rs 1,440 crore) from the government in the last financial year.
The Chennai-based bank is planning to clock 18 percent to 20 percent credit growth this year.