MUMBAI, 21 AUGUST, 2019 (GPN): Public-sector lender Central Bank of India plans to raise Rs 2,000-3,000 crore over the next two months in multiple tranches.Addressing the Media MD and CEO Pallav Mohapatra, Central Bank of India said, “the bank is looking to raise₹2,000 crore from the market over the next two months. speaking on the sidelines of the banking summit organised by the Federation of Indian Chambers of Commerce and Industry and Indian Banks Association, Mohapatra said that the funds will be raised over and above the government infusion, via rights issue or follow-on-public offer.”
Mohapatra also said that the bank will introduce few retail products whose interest rates will be linked to an external benchmark within a month.
“We will (link few retail loan products to external benchmark), a lot of changes have to be done on the IT (Information technology) side so we will gradually move to (other products) as well,” he said, adding that the bank will monitor the performance of such loans till September and later expand the bouquet of external benchmark linked loan products.
The lender through a exchange notice had said earlier that it recieved shareholder approval to raise up to Rs 5,000 crore through rights issue or qualified institutional placement (QIP).
Following the RBI Monetary policy on 5 July, several banks including SBI has linked few retail loan products with the repo rate, in an effort to comply with RBI’s push for faster transmission of rate cuts.
RBI Governor Shaktikanta Das had said on Monday that the central bank is considering asking banks to link repo rate to an external benchmark. “We are constantly engaged with the banks with regard to faster and greater transmission of monetary policy rates so that is a continuing process…He said, “I expect more initiatives and this process to become faster. A time will come when we perhaps move to a formalised arrangement.” Ends