"This year it (return to profits) is not possible. We expect to become profitable in next year," the lender's Executive Director Charan Singh said on the sidelines of its annual general meeting.
As a part of its capital raising plan, the lender is looking at the Life Insurance Corporation of India (LIC).
"We are planning to raise Rs 3,000 crore capital this year. We will try from the government and also from LIC," Singh said.
He, however, did not want to specify the amount of funds the bank is looking to raise from LIC.
LIC had infused around Rs 270 crore by way of preferential allotment of equity shares in the last fiscal. However, the insurance regulator, Insurance Regulatory and Development Authority of India, had asked LIC to prepare a roadmap to reduce its stake to 15 per cent in a few companies where the insurer has breached the ceiling.
Addressing the shareholders, Singh said the lender would also explore other fund raising options like follow-on issue or qualified institutional placements (QIP) depending on the market conditions.
On Wednesday, the bank took the shareholders' approval to issue 750 million equity shares in the current financial year, though the issue price will be determined at a later date in accordance with regulatory norms.
In May, the Reserve Bank of India (RBI) directed the Kolkata headquartered bank to take Prompt Corrective Action (PCA) as its net non-performing asset (NPA) ratio increased to 8.94 per cent in 2016-17.
Under RBI regulations, PCA is triggered if a bank's net NPA ratio crosses 6 per cent. The city-based lender posted a net loss of Rs 1,851 crore in 2016-17.
"We hope that our gross NPA level will come down this year. It is almost at the peak, and it will start coming down from this level. We expect it will be decreasing," Singh said.
Stating that the PCA would not have much impact on the bank, he said it would not affect the lender's credit growth. The bank is expecting a credit off-take growth of 6-7 per cent for this fiscal.
"There is no such restriction on credit expansion. However, we are not taking any exposure below a particular investment grade. Of course we cannot increase our unsecured exposure," he said.
Singh said the bank's turnaround plan would be prepared in the "next two-to-three days".
(This story has not been edited by Social News XYZ staff and is auto-generated from a syndicated feed.)
Doraiah Chowdary Vundavally is a Software engineer at VTech . He is the news editor of SocialNews.XYZ and Freelance writer-contributes Telugu and English Columns on Films, Politics, and Gossips. He is the primary contributor for South Cinema Section of SocialNews.XYZ. His mission is to help to develop SocialNews.XYZ into a News website that has no bias or judgement towards any.
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