Bank of India (BOI) is likely to come out with a follow-on public issue (FPO) early next year. At present the government of India owns about 70% stake in Bank of India (BOI). After the BOI FPO, the government’s stake in Bank of India is expected to be diluted by about 5%. IPO’s are a cheap source of funds for banks. At a time when interest rates are at their peak, it makes sense for banks to come out with IPO’s which will give them access to cheap funds and thus giving them a better Net Interest Margin (NIM). Bank of India FPO, if successful, will encourage other banks to follow suit.