Rs 6,211 cr capital infusion in 5 PSU banks cleared | india | Hindustan Times
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Rs 6,211 cr capital infusion in 5 PSU banks cleared

The government has approved infusing Rs 6,211 crore into five public sector banks--- Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.

india Updated: Jun 13, 2010 22:20 IST
HT Correspondent

The government has approved infusing Rs 6,211 crore into five public sector banks--- Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.

The move will enable these banks to lend an additional Rs 77,637 crore, a finance ministry statement said.

IDBI Bank will get Rs 3,119 crore, Central Bank of India Rs 2,016 crore, Bank of Maharashtra Rs 590 crore, UCO Bank Rs 375 crore and Union Bank of India Rs 111 crore.

The decision, approved on Saturday, will push the government’s total capital support during the last four months to Rs 8,911 crore, the highest in the recent times.

The capital infusion in IDBI Bank will be through preferential placement of equity, while in Central Bank of India it will be through participation in rights issue.

The three other banks — Union Bank of India, Bank of Maharashtra and UCO Bank — would get capital by way of perpetual non-cumulative preference shares (PNCPS).

These banks will undertake the necessary regulatory formalities to obtain clearances from the agencies concerned for infusion of this capital, the statement said.

The government has stipulated certain conditions as part of this capital infusion and would be closely watching the performance of these banks so that they maintain the desired capital adequacy and achieve those conditions, it said.

Finance Minister Pranab Mukherjee had in the Budget speech this year said the government would infuse additional capial of Rs 16,500 crore to public sector banks by 2011 to augment their capital base.

The government had injected Rs 1,500 crore in four banks in May 2010.