BoI to raise capital through hybrid instruments early next fiscal

Mumbai, Mar 22 (UNI) Bank of India (BoI) is contemplating to raise additional capital early next fiscal year through foreign currency capital instruments that could be incorporated under the medium term notes (MTN) programme.

The bank, which has already raised USD 600 million under the MTN programme, will try to club certain hybrid permissible instruments under the programme.

MTN was a capital raising programme to augment about USD 1 billion by end of March, 2007, and the bank already raised USD 600 million this fiscal year itself and the remaining would be raised in the next fiscal year beginning from April.

Chairman M Balachandran told newspersons here that in the first quarter of next fiscal, the bank would raise capital through foreign currency capital instruments to meet the growing demand for bank credit from all segments of the economy.

He said that the bank is not contemplating any upward revision of interest rates since the credit demand is manageble. He also felt that the current tightness in the liquidity would start easing from April onwards.

He was talking to reporters on eve of the implementation of core banking solution (CBS) in 550 branches which would be extended to 1,000 branches by end of March, 2007. With CBS implementation, about 55 per cent of the total business transactions will be put through the CBS network while over 85 per cent would be covered by end of next fiscal.

The same CBS would be shortly linked with the bank's international network hub at Singapore in order to achieve seamless business transaction across all the 22 overases branches of the bank.

The Bank has a very active business portfolios in Singapore, Hong Kong, London and USA that are likely to grow in the coming years with the proposed migration of rupee into a convertible currency.

The entire CBS networking and maintainance is being outsourced by Bank from Hewlett Packard(HP) India Sales Limited that offered package products for a period of ten years with constant upgradation of technology including software and hardware.

HP has made a successful inroad in this specialised product offering whereby it would undertake the entire works of installation, operation and maintainance of CBS across all product and service segments of the banking industry for a period of minimum 5 to 10 years.

It has bagged similar orders from Bank of Baroda, Uco Bank and is expected to get such businesses from Dena Bank and United Bank of India.

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