United Bank to transfer Rs 1,156 cr by Mar-end

Kolkata-based United Bank of India (UBI) is expected to transfer Rs 1,156 crore of equity to its reserve account by March 31, 2009 as part of its capital restructuring plan.

The public sector bank needs to trim its equity to Rs 266 crore from the current level of Rs 1,532 crore before it could go in for an initial public offering (IPO). The bank will convert Rs 110 crore of equity into perpetual non-cumulative preference shares (PNCPS).

This apart, the bank would receive Rs 250 crore by way of PNCPS as mentioned in the Interim Budget, UBI Chairman and Managing Director S C Gupta said on the sidelines of a seminar here today.

“Before going in for an IPO, banks need to reduce their equity. We have seen the banking regulation and the Acquisition of Assets Act. In keeping with the provision, it is possible to transfer the money to the reserve,” said Gupta.