Bank of India plans to pick up 20% stake in payments bank

MUMBAI: Bank of India (BoI) plans to pick up nearly 20% stake in a payments bank, the state-owned bank said on Thursday even as it reported a 70% drop in its net profit for the quarter ended December.

The bank will partner with You-First Money Express Private Limited, an entity promoted by former Citi bankers that has applied for the payments bank licence. “We will bring in 19.9% of equity, going forward, and our board has approved the same,” said V R Iyer, chairperson of Bank of India. The partner is already in the payments business and making a profit, she said.

BoI will contribute about Rs 19.9 crore. Among other business initiatives, BoI has recently obtained a merchant banking licence and has started operations 10 days ago. The bank is also in the process of finalising a preferential issue of stocks after which its common equity tier-I capital will rise to 6.88% from 6.68%, Iyer said.