courtesy-moneylife
In order to set off the accumulated loss of around ₹11,048 crore against the share premium account of the Bank of Baroda, the board of directors passed the approval to for the same on 5th June, 2021 as said by the bank during a regulatory filing.
With the help of equivalent amount standing to the credit of share premium account of Bank of Baroda, it is ready to set off its accumulated losses of ₹11,048.44 crore as of March 31, 2021. A prior permission from Reserve Bank of India along with an approval from the shareholders is essential for the bank with regards to setting off the losses.
For fiscal year 2020-21 the bank claimed to have a net profit of ₹828.95 crore which was up to 52 percent from the previous year that was ₹546.18 crore. In order to be used for defined purposes a share premium balance reserve can be looked on to. The difference between face value and the subscription price of the shares is reflected in a share premium account.
As earlier mentioned by a report, for higher margins and more room for higher volumes, the Bank of Baroda was planning to transfer a part of its capital in the international business to its domestic operations. While in India, the rates for net interest margin (NIM) is at 2.8-2.9 percent along with the rate in global business being at 1.2-1.3 percent. With regards to fight the Covid-19 pandemic, following the additional infusion by central banks, there is a surge in liquidity which has pushed down the interest rates across the globe.