IDBI Bank to seek approval for Rs 8,000 crore rupee bond borrowing for FY22

IDBI Bank on Tuesday said it is seeking approval for rupee bond borrowings worth Rs 8,000 crore for the next fiscal.

A meeting of the board of directors will take place later this week.

"It is hereby informed that a meeting of board of directors of IDBI Bank Ltd will be held on Friday, March 26, 2021 to consider the proposal for approval of rupee bond borrowings limit of Rs 8,000 crore for FY2021-22," IDBI Bank said in a regulatory filing.

The LIC-controlled bank is just out from the RBI's prompt corrective action framework.

Its Managing Director and CEO Rakesh Sharma earlier this week said that the bank will now look to grow its business in a calibrated way with more focus on profitability and in improving efficiency ratios.

On March 10, the Reserve Bank of India (RBI) removed IDBI Bank from its prompt corrective action (PCA) framework, which was imposed in May 2017, after it had breached certain regulatory thresholds, including capital adequacy, asset quality and profitability.

"With restrictions imposed by the RBI gone, we will like to go in a calibrated way and grow the business in a more profitable fashion so that my efficiency ratios improve. Our revenue, profitability and other ratios will certainly show improvement," Sharma said on Sunday.

The bank is targeting to improve net interest margin (NIM) to 3 per cent, return of assets (ROA) at above 0.60-0.70 and cost to income ratio to below 50 per cent.

In the nine months ended December 2020, its NIM stood at 2.79 per cent and cost to income at 54 per cent.

IDBI Bank stock closed at Rs 39.40 apiece on the BSE, up 5.35 per cent from the previous close