Central Bank of India to get capital support of Rs 2,406 cr

State-owned Central Bank of India is expected to get Rs 2,406 crore fund infusion through preferential issue of shares to the government by end of next month.

The board of Central Bank of India has approved on February 15 preferential allotment of shares to the government aggregating to Rs 2,406 crore, a senior official of the bank said.

The infusion of capital will be done by issuing 308,461,538 fresh shares to the President of India at Rs 78 unit, the official added.

This fund infusion is subject to shareholders approval, which will be sought on March 18 in an extra-ordinary General Meeting, he said.

Last year, the bank got capital infusion of Rs 676 crore from the government.

The government las month approved infusion of Rs 12,517 crore in around 10 state-owned banks over the next three months.

"Pursuant to the Budget announcement made by the Finance Minister on March 16, 2012, we are infusing additional capital into the public sector banks. We will infuse before the end of this fiscal year a sum of Rs 12,517 crore," Finance Minister P Chidambaram had said.

"We think about 9-10 banks will get the money...This will enable the banks to maintain the Tier I CRAR (capital to risk-weighted assets ratio) at a comfortable level and will be compliant to stricter capital adequacy norms of Basel III whenever Basel III is implemented," he had said.

The government infused about Rs 20,117 crore in public sector banks during 2010-11, and Rs 12,000 crore in 2011-12.