Govt infuses Rs10,882 cr in UCO Bank, Syndicate Bank, BoM and Central Bank
02 January 2019
The government on Monday announced infusion of Rs10,882 crore in four public sector banks, including UCO Bank, Syndicate Bank, BoM and Central Bank as part of Rs28,615 crore capital infusion to be done in about half a dozen public sector lenders.
In a regulatory filing on Monday UCO bank said it received Rs3,074 crore in the equity by way of preferential allotment.
Bank of Maharashtra received Rs4,498 crore, Syndicate Bank Rs1,632 crore and Central Bank of India Rs1,678 crore in the latest round of bank recapitalisation.
The government has already announced infusion of Rs10,086 crore in Bank of India, Rs5,500 crore in Oriental Bank of Commerce and Rs2,159 in United Bank of India.
The government has pumped in Rs28,615 crore into seven public sector banks (PSBs) through recapitalisation bonds to give relief to these banks that are under the Reserve Bank of India’s prompt corrective action (PCA), after these banks saw a mounting of stressed assets.
The government had earlier announced an infusion of Rs65,000 crore in PSBs in 2018-19, of which Rs23,000 crore has already been disbursed, while Rs42,000 crore is remaining. Earlier this month, finance minister Arun Jaitley said the government would put an additional Rs41,000 crore in PSBs over and above what was announced earlier.
On 20 December, the government sought Parliament's approval for infusion of an additional Rs41,000 crore. The recapitalisation, the finance minister said, would enhance the lending capacity of PSBs and help them come out of the Reserve Bank of India's Prompt Corrective Action (PCA) framework.
Eleven out of the total 21 PSBs are under the RBI's PCA framework, which imposes lending restrictions on weak banks. These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.