Bank of India (BOI) on Wednesday said it plans to raise capital through issuance of bonds and shares up to an amount 16,000 crore.

The state-run entity seek shareholders’ approval at its Extraordinary General Meeting (EGM) on September 19, the lender said in a regulatory filing.

The bank said it plans to issue fresh equity shares up to an amount of Rs 8,000 crore in such a way that the government’s shareholding does not fall below 51 per cent.

It will also seek approval for issuing perpetual debt instruments, including non-convertible debentures (NCDs), for an amount not exceeding Rs 8,000 crore.

It said the allotment of securities shall be through qualified institutional placement (QIP), public issue, rights issue, private placement or such other mode of issue, with or without over-allotment option.

Explaining the rationale behind the proposed fund mop-up, it said the Indian banking system has been implementing Basel III guidelines since April 2013 in a phased manner and the norms are to be fully implemented by September 30, 2020.

“The bank has been growing very diligently and cautiously for the last many years and there is constant requirement of capital. In order to meet this growing requirement, bank needs long term capital,” it said.

Besides, BOI said that it will seek shareholders’ permission for appropriation (setting aside money for a specific purpose) of accumulated losses from the share premium account of the bank.

“As on March 31, 2020, bank is having a balance of accumulated losses of Rs 23782,38,80,979.26 (Rs 23,782.39 crore) as against the securities premium amount of Rs 35331,77,29,673.58 (Rs 35,331.77 crore) in the balance sheet. It is proposed to set off the accumulated losses with an equal amount lying in the securities premium account,” it said.

As the proposed utilisation of share premium account for the purpose of setting off accumulated losses would be deemed to be a capital reduction, approval of shareholders of the bank by way of a special resolution is being sought, it said.

“The proposed set off will present true and fair view of the financial position of the bank and will not affect any ratios such as book value per share, return on equity (ROE), earning per share (EPS).

“The said set off will help the bank to improve its distributable reserves…The proposal will also put the bank in a better position to achieve its turnaround plans in a time-bound manner,” it added.

Bank of India stock closed at Rs 48.45 apiece on BSE, up 1.57 per cent.