On Thursday, the Bank of Baroda (BoB) announced plans to raise up to INR 10,000 crore ($1.34 billion) via long-term bonds for financing infrastructure and affordable housing projects during fiscal year 2023-24 and beyond if required. The move comes amid a period of strong financial performance for the bank, with a 17% year-on-year increase in total advances reaching INR 10.3 lakh crore ($138 billion), and a 14.6% year-on-year deposit growth, primarily driven by a surge in retail loans by 22.5%.
Simultaneously, BoB is dealing with restrictions imposed by the Reserve Bank of India (RBI). Under Section 35A of the Banking Regulation Act, 1949, RBI has temporarily barred the bank from adding new customers to its 'bob World' mobile app due to material supervisory concerns. The central bank demands correction of observed deficiencies and enhancement of related processes before any new customer additions can take place.
Despite these restrictions, BoB has been directed to ensure that its existing 'bob World' customers experience no disruption in service.
In related news, HSBC downgraded BoB's stock to "hold" with a target price of INR 220. This rating change comes amid the bank's ambitious fundraising plans and the ongoing regulatory issues with the RBI.
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