State-run lender Central Bank of India has said it is in the process of selling 4 per cent of its stake to Life Insurance Corporation through an institutional placement for Rs. 581 crore to meet its capital requirement of Rs. 2,000 crore this fiscal.
“We will be needing Rs. 2,000 crore for our business plans this financial year. We did go to LIC and we are getting around Rs. 581 crore from them,” chairman and managing director Rajeev Rishi said here over the weekend.
He however, did not specify a timeline for the deal with LIC.
The funds which the state-run bank will get from the life insurance major will be through private placement of shares and it will bring down the government holding to 84 per cent from the present 88 per cent.
Rishi said once the bank gets funds from LIC, it will then approach the government for around Rs. 1,500 crore of additional capital.
The government has earmarked only Rs. 11,200 crore for fund infusion into public sector banks this current fiscal, down from Rs. 14,000 crore last fiscal.