United Bank, BoM to get govt funds by July

The government plans to recapitalise all weak public sector banks by July, a senior finance ministry official said On Thursday. “Next in line for recapitalisation are Pune-based Bank of Maharashtra and Kolkata-based United Bank of India,” the official said.

On Wednesday, the Cabinet approved capital infusion of Rs 3,800 crore in three state-owned banks — UCO Bank, Central Bank of India and Vijaya Bank. The government will infuse Rs 1,200 crore each in UCO Bank and Vijaya Bank, and Rs 1,400 crore in Central Bank.

The government has identified seven public sector banks, which need recapitalisation. Bank of Maharashtra head Allen C Pereira said “Keeping in mind the credit growth projections of the bank for the next three years, we have sought Rs 1,500 crore from the government.” He said the fund infusion will also shore up the bank’s capital adequacy ratio to above 12 per cent from the current 11 per cent. According to per Basel-II norms, banks need to have a CAR of 9 per cent. As part of the second stimulus package, the government had announced plans to recapitalise public sector banks Rs 20,000 crore in two years.