Cabinet nod for UBI losses waiver

The Cabinet today approved a proposal to write off accumulated losses of the United Bank of India amounting to Rs 278.44 crore against a capital of Rs 1810.87 crore with retrospective effect from March 31, Science and Technology Minister Kapil Sibal said.

The United Bank is expected to return equity share capital of around Rs 700 crore to the government and convert a portion of the remaining equity share capital of around Rs 832.43 crore into preference shares.

Sibal added that the exact amount of the portion to be converted would be decided in consultation with the Reserve Bank of India.

The Cabinet move is expected to strengthen the balance sheet of the bank. it would also help create Investment Fluctuation Reserve as per RBI guidelines and assist the bank in meeting future capital requirements through an IPO, Sibal said.

The government has in the past permitted 13 banks to write off their accumulated losses against capital.

Meanwhile, in an attempt to end a long-standing dispute over the Kishanganga project, India will now propose to Pakistan some modifications in the 330-Mw hydro-electric power plant in Jammu and Kashmir, to convert it into a run-of-the-river project, instead of generating electricity from water stored in a dam.

This comes in the wake of Pakistan's objection to the storage of 220 million cubic metres of Indus river water in a reservoir.

The Cabinet also approved floating of tenders for the Bhubaneshwari opencast project of Mahanadi coalfields for outsourcing coal production and overburden removal.

Besides, the Cabinet gave its approval for signing of a memorandum of agreement between India and the US. The umbrella agreement provides for assistance from the Federal Aviation Authority in developing and modernising the country's civil aviation infrastructure in managerial, operational and technical areas.

The assistance covers provision of training to civil aviation personnel, inspection of aviation equipment and air navigation facilities, among others.

As part of the prime minister's reconstruction plan for Jammu and Kashmir, the Cabinet also approved relaxations in the existing guidelines of the Swarna Jayanti Shahari Rojgar Yojana.

The scheme is expected to benefit people in the BPL category in the state at a cost of nearly Rs 27 crore to the Centre.