Chennai, Jun 14 (IANS): With its bottomline back in black after a long time, the Indian Overseas Bank (IOB) has approached the Reserve Bank of India (RBI) seeking it be taken out of the Prompt Corrective Action (PCA) fold, a top official said.

Managing Director & CEO Partha Pratim Sengupta also said that the IOB plans to raise additional funds of about Rs 2,000 crore from a follow-on equity issue and Rs 1,000 crore by issue of bonds.

Addressing reporters, Sengupta said the bank has approached the RBI to be taken out of PCA as its financial metrics have turned good.

The bank also said it plans to come out of PCA by focusing on loan recovery, low cost deposits and less capital consuming advances.

The bank closed last fiscal with a net profit of Rs 831 crore as against a net loss of about Rs 8,527 crore.

The total income for the year ended March 31, 2021 stood at about Rs 22,525 crore as against about Rs 20,712 crore for FY20.

According to Sengupta, the income from treasury operations had beefed up the bank's other income and the reduction in cost of funds contributed to the profitability.

In a regulatory filing, the IOB said its Board has approved the issue of 125 crore equity shares at an appropriate premium to the public by way of follow-on public offer/rights issue with or without participation of the government.

The Board also decided that the issue could also be to qualified institutional buyers, employee shareholders, and on preferential basis to insurers and mutual funds.

It also approved the issue of Basel III compliant tier II bonds up to Rs 1,000 crore in one or more tranches on private placement or public issue.

On March 31, 2021, the IOB had received Rs 4,100 crore as capital infusion by the government at an issue price of Rs.16.63 per equity share of Rs.10 each.

During the year under review, IOB's total business stood at Rs 3,79,885 crore (deposits Rs 2,40,288 crore, advances Rs 1,39,597 crore) up from Rs 3,57,723 crore (deposits Rs 2,22,952 crore, advances Rs 1,34,771 crore).

The bank said it had recovered about Rs 6,831 crore from non-performing assets (NPA) accounts last fiscal.

The bank's gross NPA (GNPA) reduced from 14.78 per cent as at March 31, 2020 to 11.69 per cent as at March 31, 2021.

The net NPA (NNPA) went down from 5.44 per cent, as at March 31, 2020, to 3.58 per cent as at March 31, 2021.

Sengupta said IOB is targeting GNPA of less than 10 per cent this fiscal.

According to him, the bank has identified about Rs 8,000 crore loan for restructuring and a cash recovery target of about Rs 4,600 crore.

Sengupta also said that the IOB had merged 53 branches last fiscal and one or two branches may be merged this year.