OBC seeks Rs 1,000 crore capital support from govt

"We have requested for Rs 1,000 crore capital support from the government," OBC Chairman and Managing Director T Y Prabhu told reporters here. This will help the bank increase credit growth in the coming years, he said, adding that the capital support may come through during the current fiscal.

Meanwhile, the government said it considering capital infusion in banks where the government's holding is close to the regulatory ceiling of 51 per cent. The move is aimed at providing capital to the banks, as well as creating headroom for raising capital from the capital market in future.

"The next tranche of capital infusion in the banks will be to raise the government's holding in the public sector banks to a certain level, which is being worked out," Department of Financial Services Secretary R Gopalan said on the sidelines of the launch of Oriental Bank of Commerce's new Grameen Swarojgar Card here.

OBC would also qualify for capital infusion, as the government holding in the bank stands at 51.1 per cent. The bank's Grameen Swarojgar Card scheme provides loans to small entrepreneurs in rural areas.

The objective of the scheme is to provide hassle-free loans to micro-entrepreneurs like vegetable vendors, cobblers and carpenters, without insisting on collateral, Prabhu said.
The rate of interest on such a facility would be 10.5 per cent, while a 0.5 per cent concession would be given to women beneficiaries.

On credit growth, the OBC Chief said the bank expects loan growth of 20-22 per cent during the fiscal.