In the monsoon session government give approval for infusing Rs 20000 Cr in public sector banks in the current financial year. A capital support of about Rs 1000 Cr from the government in order to create buffer for any exigency, a top official of the bank is provided to Indian Overseas bank by the government the bank said. The state owned lender which has announced profit for the last three consecutive quarters can continue the trend in the coming fiscal years because it can recover and give a huge profit to business if you see it from a business point of view, there is an increased focus in the investment this amount on different sectors or to generate more employment within the country and for business pick up. The bank recorded less profit if you see the insight of September quarters. The bank posted a profit of Rs 148crore as compared to a net loss of Rs 2,254 Crore in the same period a year ago through which it has to face a heavy loss of assets of bank, Net profit in the quarter grew 22.3 percent from Rs 121 crore in April-June.
If you see the stats, the profit of Rs 148 Crore was in IOB post. The capital is needed to make changes in the trends and to regulate the functioning of bank more frequently, the motive of the bank is they want their profit to strengthen their capital this is the aim that they are marching from many years. To drive the functions of bank internally and externally it is required to make a good use of this capital. The shareholders need to know when and where to put their money and how to rotate the float amount within the industry. As a part of the first batch of supplementary demand for grants. Parliament in the monsoon season give approval for infusing this capital, to meet the regulatory requirements a capital is necessary to buy the assests. In 2019-2020 the government made capital infusion of Rs 70000 Cr into PSBs. Sengupta further said the bank has approval for raising Rs 5000 Cr from the market but there is no immediate and appropriate plan to implement.
The size of market is very high and so it is sometimes impossible to meet the requirements demand from the customer because bank doesn’t have as strong database compared to any growing bank. As the rise of blockchain is so much it is very much difficult to sustain a place for the records of data. Talking about strengthening the balance sheets Senguptasaid one thing is very clear that we are on track and can fulfill any demand from the customer end. On sequential basis also profits have gone up despite increasing provisions and promoting many internal employees for a better work process. The idea is to make balance sheet stronger and understandable and therefore we have made adequate provisions including that for COVID-19 of Rs 682 Cr which is 5 percent of the loan book. The bank registered a substantial improvement in asset quality as gross non performing assets plunged to 13.04 percent of gross advances from 20 percent at the end of September 2019.