Public sector lender Dena Bank today said it has sought Rs 2,000 crore capital infusion from the Central government to support its future loan growth as the tier-I capital of the Bank fell below 8 per cent by the end of June quarter, a top official said.
“We have requested for Rs 2,000 crore capital infusion from the government to support future loan growth. We hope that it may come in two tranches,” Chairman and Managing Director of Dena Bank, Ashwani Kumar said here.
By the end of June quarter, the public sector lender’s capital adequacy ratio stood at 11.12 per cent even as tier-I capital, which is critical to support loan growth, fell below 8 per cent to 7.28 per cent.
Kumar said during the first quarter, the bank had consciously not grown its loan book aggressively as its core capital (tier-I) came below 8 per cent.
The public sector lender had requested for Rs 1,200 crore of capital infusion from the government in the last fiscal.
However, it didn’t receive any as its tier-I capital was above 8 per cent in the previous fiscal.
This year’s budget has provided for Rs 14,000 crore of capital infusion into public sector banks in the current financial year.
Barring Dena Bank, other public sector lenders like IDBI Bank, Indian Overseas Bank, Bank of Maharashtra are also likely to see capital infusion from the government on priority basis due to their low core capital.
Referring to loan growth scenario in the future, Kumar said the public sector lender was focusing on retail and SME segment to drive growth in advances.
The Bank hopes to grow its loan book by 16 per cent in the current fiscal, he added.