The government run Canara bank has planned to raise 5000 crore rupees equity capital from various sources. On August 10, Canara Bank shareholders annual general meeting (AGM) will be held. The new business proposal from the bank should get a nod from the shareholders at the AGM. The meeting will be held via video streaming because of the coronavirus pandemic.
The funds raised by Canara Bank are likely to be used for expansion, to increase capital adequacy, Base III norms implementation which are mentioned in its 2019-20 annual report.
As per the Canara Bank’s annual report FY20 the Board of Directors have decided to raise upto 5000 crores from rights issue, preferential issue to the govt and financial institutions, follow on issue and other modes.
From April 1, 2020 the Syndicate Bank merged into Canara Bank. Now the bank has 1030.23 crore rupees equity capital and 13.65 percent capital adequacy ratio as on March 31, 2020. The regulatory requirement is 10.875 percent.
Canara Bank has posted Rs 2236 crores net loss in 2019-20 because of increase in provisions. NPA’s have become a big problem for banks in India. The current pandemic situation might increase NPA’s as many industries are shut down and exports and consumption has come to a halt.