Public sector lender Indian Overseas Bank (IOB) said on Thursday the board has approved capital requirement of Rs 35 billion, under Tier I capital, for the Financial Year 2014-15.

The board has accorded permission to the bank to raise capital by way of issue of equity shares of Rs 10 each at a price determined by SEBI (ICDR) Regulations 2009, to GOI to the extent of their capital infusion.

In addition, the board approved the bank to issue equity shares of Rs 10 each to qualified institutional buyers by way of private placement, up to an extent of not exceeding Rs 12 billion (including the share premium) out of the shortfall in the Tier I capital requirement of Rs 35 billion assessed by the bank.

Shares of the bank gained Rs 1.5, or 1.77%, to trade at Rs 86.40. The total volume of shares traded was 118,564 at the BSE (10.07 a.m., Friday).