Mumbai: As it is left out of the list of nine banks for capital infusion from the government, Bank of India today claimed its fundamentals are much better than those selected and has called for a different treatment to it citing its large international presence.
Last week, government said it would infuse Rs 6,990 crore into nine of its 27 banks including SBI, BoB, and PNB.
The government also announced new parameters to determine capital allocation, focusing on efficiency and earnings metrics, including returns on equity and assets.
To be eligible for fresh capital, a state-run bank's return on assets (RoA) must be better than the average for all public sector lenders for the past three years, while the return on equity (RoE) must be better than the average for the past one year.
"I would like to clarify that we have better RoE from many other banks which have got the capital now. They have taken average RoA for the last three years and that is where we have got left out," Bank of India Chairperson and Managing Director Vijaylaxmi Iyer told reporters while announcing Q3 numbers wherein it reported a 70.4 per cent dip in net profit on rising NPAs and provisions.
She said the government has allowed SBI, BoB and Bank of India to be internationally active, as one third of their operations are from overseas.
"You all would appreciate that the spread in the international operations is always much lower which depresses the RoA. So, banks like us should have been treated differently. We cannot be classified along with others when you measure the RoA," Iyer claimed.
