Govt to infuse Rs 848 crore into Dena, Vijaya Bank

Two more state-owned banks – Dena Bank and Vijaya Bank – on Thursday said they would get Rs 848 crore from the government, helping them shore up their capital base and finance growth in loan portfolios.

The government will infuse Rs 539 crore and Rs 368 crore in Dena Bank and Vijaya Bank, respectively, by subscribing to their equity shares on a preferential basis.

“We had asked for Rs 1,300 crore over a period of three years. We were expecting about Rs 600 crore this year. We hope to get Rs 400 crore and Rs 300 crore in next two years, respectively, “ a senior official of Dena Bank, who did not wish to be named, told Business Standard.
 

CAPITAL GAIN
Bank	Capital (Rs cr)	Capita Adequacy  Ratio (%)	Tier-I Adequacy Ratio (%)
Corporation Bank	309	14.27	8.13
Dena Bank	539	11.08	7.20
UCO Bank	940	13.02	7.47
United Bank of India	308	12.51	8.29
Vijaya Bank	368	13.67	9.25

The bank closed the December quarter with a capital adequacy ratio of 11.08 per cent under Basel II. Its Tier-I capital adequacy ratio stood at 7.2 per cent.

With this move, the government is all set to inject Rs 2,464 crore in five state-owned banks. Other lenders include Corporation Bank, UCO Bank and United Bank of India.

UCO Bank will get Rs 940 crore, the highest among the five banks. While its capital adequacy ratio stood at 13.02 per cent under Basel II, its Tier-I adequacy was 7.47 per cent as of December-end.

The government will infuse Rs 309 crore and Rs 308 crore in Corporation Bank and United Bank of India, respectively. Allahabad Bank and Indian Overseas Bank are also expected to benefit from the current recapitalisation programme.

Earlier, the government said it aimed to recapitalise select state-owned banks to help them maintain a Tier-I capital adequacy ratio of over 8 per cent this financial year.

In his budget speech last year, Finance Minister Pranab Mukherjee had announced a Rs 16,500-crore recapitalisation programme for state-owned banks. Later, it announced capital infusion of another Rs 6,000 crore.