RBI turns down Maha Bank's request to set-off losses on share premium

The Reserve Bank of India (RBI) has rejected Bank of Maharashtra's (Maha Bank's) request to allow it to set-off the accumulated losses of Rs 7,360.29 crore against the balance lying in share premium account and revenue reserve account.

The RBI, through a letter on September 27, 2019, has intimated its inability to accede to the request by the bank for setting-off the accumulated losses of Rs 7.360.29 crore (at end of March 2019), as against the balance lying in share premium account and revenue reserve account. 

The public sector lender's stock closed two per cent lower at Rs 10.8 per share on the BSE. The shareholders and board of directors had already given nod for Maha Bank's for the proposed set-off of the accumulated losses of the Bank subject to necessary approvals/ permissions. 

The bank executives said it had approached the regulator with a request to set-off and clean up the balance sheet and help the bank approach the public for capital on base of improved financial profile. 

The bank would look for higher equity infusion from the central government, its promoter, and also look at tapping tier-II bonds to enhance capital adequacy. 

The bank earned a net profit of Rs 81.09 crore in the first quarter ended June 2019, while the business stood at Rs 2.32 trillion at end of June 2019 as compared to Rs 2.19 trillion a year ago, registering an increase of 5.7 per cent. The total deposits rose by 2.61 per cent at Rs 1.39 trillion as against Rs 1.35 trillion in June 2018.