Oriental Bank of Commerce is planning to acquire a South-based Bank to expand its operations in South India.

The Bank intends to fund the acquisition by raising capital through bonds. It had also applied to the Government for capital infusion of Rs. 1000 cr to aid growth in the next few years. OBC's Q2 net profit stood at Rs. 271 cr and it has a CAR of 12.7%.

In a bid to strengthen its CAR, OBC raised tier I capital Rs 300 cr by issuing Innovative Perpetual Debt Instrument on Private Placement basis.

OBC is one of the 18 nationalized banks seeking fresh infusion of funds to maintain solvency ratio. The funds would come from World Bank and the shortfall to be met by GoI. World Bank is providing a loan of Rs. 10,000 Cr for injection of capital.

In 2004, OBC acquired crisis-hit Global Trust Bank, which helped establish its footprint in South India. OBC merged about 100 branches of GTB as part of an amalgamation process along with non-performing assets of Rs1,362 crore at the end of March 2004.

Last month, Bank of India was rumoured to be interested in acquiring OBC in a move to consolidate PSUs in India, although OBC had not been officially approached.

Head- quartered in Delhi, the Bank is a PSU with 51% GoI holding. OBC plans to expand its network, opening around 200 new branches annually in the next three financial years. It currently has 1,429 branches in the country, apart from 59 extension counters, with 891 ATMs

The Bank had recently opened a Representative Office at Dubai which is also its first offshore Office.