The Chennai based public sector bank, Indian Overseas Bank is to get a funding worth Rs 1100 crore from the government, as the bank is facing tough times due to soaring NPA levels. The Bank was successful in meeting the parameters set by the government in order to become eligible for a turnaround-linked capital infusion plan, as informed by Indian Overseas Bank via a leading business daily.
The public sector bank is expecting funds amounting to Rs 1550 crore from the Centre, but the amount to be actually bailed out has been decreased, as some part of the capital is being distributed to IDBI. The government had set further 5 parameters for capital injection. It includes cash recovery more than 4 times the target provided. The Risk Weighted Assets target was set at a maximum of 110.42, while Indian Overseas Bank achieved 108.25.