Govt infuses Rs 1,500cr into 4 banks
The government has infused Rs 1,500 crore into four public sector banks, including UCO Bank and Central Bank of India, as part of their recapitalisation package.delhi Updated: Jun 06, 2010 14:20 IST
The government has infused Rs 1,500 crore into four public sector banks, including UCO Bank and Central Bank of India, as part of their recapitalisation package.
Of the total, Vijaya Bank got Rs 700 crore, UCO Bank got Rs 300 crore, Central Bank of India and United Bank of India received Rs 250 crore each, sources said. The letter to this effect was issued by the government on June 2.
The government has instructed to issue perpetual non-cumulative preference shares (PNCPS) in favour of the President, the recently listed United Bank of India said in a statement. Accordingly, the bank has issued 25,000 PNCPS of Rs 1 lakh each on June 4 in the name of the President, it added.
The fund infusion will enable these banks to maintain comfortable level of capital to risk-weighted asset ratio for supporting credit requirement of the productive sectors.
During the past fiscal, the government had provided Rs 1,200 crore capital support to Central Bank, UCO and United Bank of India to meet their capital requirement.
UCO Bank and Central Bank got Rs 450 crore each while United Bank of India which recently got listed, received a financial assistance of Rs 300 crore.
The government plans to provide financial support of Rs 15,000 crore to the public sector banks during the current fiscal. The Cabinet has already approved capital infusion plan that will increase the lending capacity of banks by Rs 1.85 lakh crore.
The exact amount, the mode of capitalisation and other terms would be decided in consultation with the banks at the time of infusion.
The Rs 15,000-crore fund infusion for tier I capital instruments of PSBs would enable them to expand their credit growth by about Rs 1,85,000 crore. This additional credit availability is likely to benefit employment-oriented sectors, especially agriculture, micro and small enterprises and entrepreneurs.