Debadatta Chand, MD and CEO, Bank of Baroda | Photo credit: PTI
In what appears to be a change of direction, the public sector bank (PSB) has provided NBL with fresh capital and strengthened its management structure and governance.
Bank of Baroda infused around ₹169 crore into NBL in the second quarter (Q2) of FY26, going by the latter’s balance sheet.
During Q2 FY26, NBL’s subscribed capital increased by ₹48.28 crore to ₹165.72 crore, and share premium account increased by ₹120.7 crore to ₹258.12 crore.
It may be pertinent to mention here that RBI Governor Sanjay Malhotra last month said that the proposed barrier on overlap in activities of a bank and its group entity will be removed.
So, Bank of Baroda can continue to hold majority stake in NBL, going by the above observation.
In December 2022, the bank’s Board of Directors had approved the divestment of its majority stake in NBL. The PSB then invited expressions of interest for engaging a strategic partner in NBL. Bank of Baroda currently holds 98.57 percent stake in this subsidiary.
Powering NBL
In an interaction with business line, Debadatta Chand, MD & CEO, said, “Strengthening NBL is one of our core strategies. We have provided fresh capital to this entity.
“We have strengthened the management structure of the Bank by removing an officer from the CGM (Chief General Manager) as MD & CEO. Earlier, a DGM (Deputy General Manager) was deputed as head of NBL.”
Chand emphasized that NBL’s governance has also been strengthened.
“Currently, all efforts are focused on making NBL strong. Like today, strengthening is all we do,” he said.
At end-September 2025, NBL’s gross advances rose 1.25 percent year-on-year (yoy) to ₹4,864 crore, compared to ₹4,804 crore as on September 30, 2024.
Total deposits remained stable at ₹8,071 crore at end-September 2025, against ₹8,055 crore as on September 30, 2024.
NBL’s net profit rose to ₹30 crore in the second quarter of FY26 from ₹28 crore in the second quarter of FY25. At the end of March 2025, the Bank had 173 branches, the majority of which were in Uttarakhand and Uttar Pradesh.
PIM for NBL divestment
The December 2022 Preliminary Information Memorandum (PIM) for the disinvestment of BoB’s majority stake in NBL noted that there is a good opportunity for NBL to bring in a suitable partner and leverage its growth potential by transforming itself from a traditional bank to a technology-based bank to substantially increase its presence and market share.
To achieve this, NBL requires additional capital to meet business growth and capital expenditure for setting up new branches and improving infrastructure at existing branches.
The PIM underlined that NBL’s capital raising will support business growth, expand the branch network and upgrade the infrastructure of the existing branches, depending on requirements.
Moreover, it will help the Bank of Baroda reduce its stake in percentage terms, which will help meet regulatory requirements.
Over time, with an increase in NBL’s valuation, BoB may further align its holdings with regulatory norms through an initial public offering or further share sales, etc., according to the PIM.
Published on November 3, 2025
#Bank #Baroda #changing #disinvestment #Nainital #Bank #injecting #capital #subsidiary