include Bank of India, IDBI Bank and UCO Bank. The actual fund infusion will take place in the next few weeks after they get the necessary regulatory approval, including a nod from the shareholders. They will receive capital through preferential issue of shares
Kolkata-based UCO Bank today announced approval of board for
the proposal to issue equity shares on preferential basis to the government
against capital contribution of Rs 1,375 crore subject to necessary approval.
Besides, Central Bank of India said the capital raising
committee of the board approved raising of equity capital by allotting up to
3.88 crore shares at the issue price of Rs 83.15 per unit aggregating to Rs 323
crore. At the same time, the government has decided to infuse Rs 2,257 crore in
the Bank of India, Rs 2,729 crore in IDBI Bank, Rs 650 crore in Bank of
Maharashtra, and Rs 243 crore in Dena Bank.
While the government decides the mode for recapitalisation
of all state-run banks, it advanced the release of funds to these six banks to
help them meet their equity requirements and enable them to resume normal
business and help them come out of prompt corrective action. Finance Minister
Arun Jaitley in October had announced an unprecedented Rs 2.11 lakh crore
two-year road map to strengthen PSBs, reeling under high non-performing assets
(NPAs) or bad loans. Their NPAs have increased to Rs 7.33 lakh crore as of June
2017, from Rs 2.75 lakh crore in March 2015. The plan includes floating
re-capitalisation bonds of Rs 1.35 lakh crore and raising Rs 58,000 crore from
the market by diluting government’s stake. The government is working on the
modalities for issuing the recapitalisation bonds as it aims to front-load the
infusion with an aim to strengthen the state-owned banking sector, sources
said, adding that the announcement in this respect, including detailed
guidelines, will be made during this month.
Jaitley had also announced that banks would get about Rs
18,000 crore under the Indradhanush plan over the next two years. Under the
Indradhanush road map announced in 2015, the government had announced infusion
of Rs 70,000 crore in state- owned banks over four years, while they will have
to raise a further Rs 1.1 lakh crore from the market to meet their capital
requirement in line with global risk norms, known as Basel-III. In the last
three-and-a-half years, the government pumped Rs 51,858 crore capital in the
PSBs. The remaining Rs 18,142 crore will be injected into the banks over the
next two years.
No comments:
Post a Comment