Icici Bank Plans To Cut Capital By Rs 350 Crore

ICICI Bank is planning to pare the authorised capital of the bank from Rs 2,250 crore to Rs 1,900 crore.

A resolution to this effect will be moved by the company at its eighth annual general meeting (AGM) on September 16. This will be the first AGM of the bank after ICICI merged with it. The capital recast is triggered by the fact that in terms of the provisions of Section 12(1)(I) of the Banking Regulation Act, 1949, the subscribed capital of a banking company must not be less than the authorised capital.

At present, subscribed capital of ICICI Bank is Rs 963 crore consisting of Rs 613 crore equity capital and Rs 350 crore preference capital.

 

Hence it needs immediate capital infusion if it wants to maintain the authorised capital at the existing level.

By moving this resolution, ICICI Bank has made it clear that it is not planning any capital raising programme in the near future.

Subject to the approval of the Reserve Bank of India, ICICI Bank is also planning to change the memorandum of association of the company to restructure its capital.

According to the plan, Rs 1,900 crore authorised capital will have two parts: Rs 1550 crore equity capital consisting of 155,00,00,000 shares of Rs 10 each and a Rs 350 crore preference shares consisting of 350 shares of Rs 1 crore each.

At present, the Rs 2,250 crore authorised capital of the company consists of Rs 1900 crore worth of equity share capital and Rs 350 crore preference shares following the merger of ICICI Ltd, ICICI Capital Services Ltd and ICICI Personal Services Ltd with ICICI Bank.