Banks set to get Rs5,050 cr in government funding
29 March 2016
The government will soon infuse additional capital of about Rs5,050 crore in some public sector banks, including UCO Bank and Syndicate Bank, this week.
Parliament has already approved this amount for meeting additional expenditure on recapitalisation of public sector banks (PSBs) earlier this month.
The capital infusion by the finance ministry in the identified banks could be done as early as this week itself, reports said.
Syndicate Bank and UCO Bank will be issuing shares to the government on a preferential basis to raise a total Rs1,675 crore subject to regulatory approvals.
UCO Bank said it will raise Rs 935 crore by issuing preferential shares to the government while Syndicate Bank will be raise up to Rs740 crore through preferential allotment following board approval on 31 March.
Besides UCO and Syndicate, other lenders which are contenders for the fresh round of infusion are Central Bank of India, Indian Bank, Oriental Bank of Commerce, Vijaya Bank and United Bank of India.
It will be a part of the Rs25,000 crore capital infusion plan earmarked for the current fiscal.
In the first tranche, as many as 13 public sectors banks were given fund support of Rs19,950 crore. Of this, the country's biggest lender State Bank of India got the highest amount of Rs5,393 crore followed by Bank of India at Rs2,455 crore.
Besides, the government infused Rs2,229 crore in IDBI Bank, Indian Overseas Bank Rs2,009 crore and Punjab National Bank Rs1,732 crore.
Last year, the government announced a revamp plan 'Indradhanush' to infuse Rs70,000 crore in state-owned banks over four years, while they will have to raise a further Rs1.1 lakh crore from markets to meet their capital requirements in line with global risk norms Basel-III.
In line with the blueprint, PSU banks will get Rs25,000 crore this fiscal and also in the next fiscal. Besides, Rs10,000 crore each would be infused in 2017-18 and 2018-19.