Will Bank of Baroda not sell its stake in Nainital Bank? BoB infuses Rs.169 Crore in Nainital Bank
It seems Bank of Baroda (BoB) has paused its earlier plan to sell its majority stake in Nainital Bank Ltd (NBL). Nainital Bank is a subsidiary of Bank of Baroda, which is owned by the Ministry of Finance of the Government of India. Bank of Baroda has chosen to strengthen Nainital Bank by providing fresh capital, improving its management structure, and expanding its board.
Bank of Baroda infuses Rs.169 Crore Capital in Nainital Bank
According to Nainital Bank’s latest financial report, Bank of Baroda has infused around ₹169 crore into the bank during the second quarter (Q2) of FY26. As a result, Nainital Bank’s subscribed capital increased by ₹48.28 crore, reaching ₹165.72 crore and the share premium account rose by ₹120.7 crore to ₹258.12 crore.
The Reserve Bank of India (RBI) recently made a key regulatory change. RBI Governor Sanjay Malhotra announced that the proposed ban on overlapping businesses between banks and their group entities is being removed. This means Bank of Baroda can continue holding a majority stake in Nainital Bank, removing a major hurdle that had earlier prompted the bank to plan its exit.
Back in December 2022, Bank of Baroda’s board had approved a plan to divest its majority shareholding in Nainital Bank. The bank had even invited expressions of interest from potential strategic partners to invest in the subsidiary. Currently, Bank of Baroda holds a 98.57% stake in Nainital Bank (NBL).
The Preliminary Information Memorandum (PIM) issued in 2022 for NBL’s proposed stake sale stated that the bank needed a strategic partner to modernize and expand. It said NBL had the potential to transform from a traditional bank into a technology-driven institution, which would help it grow its presence and market share. The document also emphasized that additional capital was essential for business expansion, branch openings, and infrastructure upgrades. It suggested that over time, as NBL’s valuation increased, BoB could reduce its stake through an IPO or further stake sale in line with regulatory requirements.
Speaking to BusinessLine, Bank of Baroda’s Managing Director and CEO Debadatta Chand said,
“Strengthening NBL is one of our core strategies. We have provided fresh capital to this entity.”
He stated that BoB has enhanced NBL’s management structure by appointing a Chief General Manager (CGM)-rank official as its MD & CEO, compared to the earlier practice of deputing a Deputy General Manager (DGM).
“Currently, the entire effort is to make NBL strong. Strengthening is the only focus right now,” Chand said.
Advertisement
Nainital Bank’s Financial Performance
At Present, the Bank has 176 branches operating in five states i.e. Uttarakhand, Uttar Pradesh, Delhi, Haryana and Rajasthan. The total business of the Bank was Rs. 13,225.68 crore as on 31/03/2025 against 13,086.87 as on 31/03/2024.
- Total Advances of the Bank Stood at Rs. 4,969.86 Crores as on 31/03/2025.
- Total Deposit of the Bank Stood at Rs. 8,255.82 Crores as on 31/03/2025.
- CASA Deposit of the Bank Stood at Rs. 3424.06 Crores as on 31/03/2025 against Rs. 3451.62 Crores as on 31/03/2024.
- CD Ratio of the Bank improved to 60.20% as on 31/03/2025 against 58.29% as on 31/03/2024.
- NIM is 3.30% as on 31/03/2025 against 3.53% as on 31/03/2024.
- CRAR stood at 16.76% as on 31/03/2025 against 15.22% as on 31/03/2024.
- The Operating profit of the Bank is Rs.89.03 crore.
- The Net NPA stood at 0.56% as on 31/03/2025 against 0.94% as on 31/03/2024.
