New Delhi: Indian Bank may come out with a follow-on public offer (FPO) next fiscal if market conditions improve, a top official said.

"We do not require capital immediately...We may go in for FPO in the next fiscal (2013-14)," the state-owned bank's Chairman and Managing Director T M Bhasin told PTI.

The board has already given approval for equity dilution to the extent of 10 percent, he said.

At present, the government holds 80 percent stake in the Chennai-headquartered bank.

Shares of Indian Bank closed at 163 on the BSE on Friday, valuing it at 7,005 crore.

Bhasin said the bank's total capital adequacy stands at 12.98 percent. Of this, Tier-I is about 10.72 percent at the end of June, 2012.

The bank is adequately capitalised to meet credit growth of 18 percent for the current fiscal, he said.

Talking about overseas expansion plan, Bhasin said the bank plans to open a branch in Hong Kong. The bank has already sought regulatory permissions for opening its office in Hong Kong.

Indian Bank has three foreign branches at Singapore and Colombo and Jaffna in Sri Lanka.

Last month, Indian Bank reduced interest rates on home and car loans by up to 0.5 percent.

"We have recently reduced interest rate on home and vehicle loans with an aim to increase credit disbursement in these segments," Bhasin said.

In the housing loan segment, rates has been reduced by up to 0.5 percent, while interest rate on car loan has been slashed by 0.25 percent effective August 25.

Housing loan up to Rs 30 lakh is now available at 10.5 percent or base rate irrespective of the tenure of the loan. Similarly, rate has been reduced for home loans between 30-75 lakh to 10.75 percent or base rate plus 0.25 percent.

The bank has also waived the processing or administrative charges on such loans.

Besides, it has brought down its car loan rates from 11.25 percent to 11 percent.