IDBI Bank board to consider Rs 3,119 cr govt funding tomorrow

Public sector lender IDBI Bank today said its board will meet tomorrow to consider government fund infusion to the tune of Rs 3,119.04 crore.

This relates to capital infusion by the government by buying 25.95 crore equity shares at Rs 120.19 apiece as part of its planned capital support to the state-run banks to shore up their lending capacity.

The board will consider tomorrow a preferential issue of equity shares aggregating to Rs 3,119.04 crore to the government, IDBI Bank said in a filing to the Bombay Stock Exchange today.

Finance minister Pranab Mukherjee in the last budget had announced that the government planned a capital support of Rs 15,000 crore to public sector banks in the current fiscal to ensure that they are able to attain a minimum 8 per cent tier-I capital by March 31, 2011. Following this, the Cabinet approved the capital infusion plan, which will help public sector banks to increase their lending capacity by Rs 1.85 lakh crore.

Three other banks, namely Union Bank, Bank of Maharashtra and UCO Bank would also get capital under the capital infusion scheme.

Shares of IDBI Bank closed at Rs 121.95, down 0.61 per cent on the BSE today.