Govt infuses Rs 7 bn in Syndicate Bank for preferential allotment of shares

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Public sector Syndicate Bank Monday said it has received capital infusion of Rs 7.28 billion from the government in lieu of preferential allotment of shares.

The bank said that the finance ministry had conveyed to the bank on October 17 of getting government sanction for release of Rs 7.28 billion towards contribution of the preferential allotment of equity shares during 2018-19 under plan as government's investment.

"The said fund was received by the bank on October 22 and has been kept in Syndicate Bank Share Application Money Account," it said in a regulatory filing.

The bank will be taking necessary approvals for allotment of requisite equity shares to the government in due course of time, Syndicate Bank added.
 

Central Bank of India will get Rs 23.54 billion in return to preferential allotment of shares to the government. The bank last week said that it will take up for approval the allotment of more than 35.4 crore equity shares to government to infusion capital at its extra-ordinary general meeting to be held on November 13.

As part of PSBs' recapitalisation, the government in October 2017 had announced a massive Rs 2.1 trillion infusion in the course of 2017-18 and 2018-19 with the objective of strengthening them in the face of mounting non-performing assets (NPAs).

As per the plan, the PSBs are to get Rs 1.35 trillion through re-capitalisation bonds, and the balance Rs 58,000 crore through raising of capital from the market.

In 2017-18, Rs 881.39 billion was infused into 20 public sector banks (PSBs).
 

The banks will get capital infusion of Rs 650 billion in 2018-19.

Earlier in July this year, five PSBs including Punjab National Bank, Corporation Bank and Andhra Bank had received a total of Rs 113.36 billion out of the capital infusion plan for this fiscal.

In this, PNB which is hit by Nirav Modi scam, got the highest amount of Rs 28.16 billion, Allahabad Bank Rs 17.90 billion, Andhra Bank Rs 20.19 billon, Indian Overseas Bank Rs 21.57 billion and Corporation Bank Rs 25.55 billion.

Stock of Syndicate Bank closed 0.63 per cent down at Rs 31.65 on the BSE.