State-owned United Bank of India on Thursday said the government has decided to infuse Rs 21.59 billion in the bank as part of Rs 286.15 billion capital infusion to be done in about half a dozen banks.
"The bank proposes to secure the shareholders' approval to the proposed preferential allotment by a Special Resolution by convening an Extraordinary General Meeting shortly. Till such time all formalities are completed and allotment made, the amount shall remain in Share Application Money Account," it said.
According to sources, the government has decided to pump Rs 286.15 billion into seven public sector banks (PSBs) through recapitalisation bonds soon.
Out of these seven PSBs, Bank of India is likely to get the highest amount of Rs 100.86 billion, followed by Oriental Bank of Commerce, which might get Rs 55 billion through recapitalisation bonds, sources added.
Other banks that are likely to receive capital infusion in this round included Bank of Maharashtra, which may get Rs 44.98 billion and UCO Bank (Rs 30.56 billion).
The government had earlier announced an infusion of Rs 650 billion in PSBs in 2018-19, of which Rs 230 billion has already been disbursed, while Rs 420 billion is remaining.
Earlier this month, Finance Minister Arun Jaitley said the government would put an additional Rs 410 billion in PSBs over and above what was announced earlier.
On December 20, the government sought Parliament's approval for infusion of an additional Rs 410 billion.
The recapitalisation, the finance minister said, would enhance the lending capacity of PSBs and help them come out of the Reserve Bank of India's Prompt Corrective Action (PCA) framework.
Eleven out of the total 21 PSBs are under the RBI's PCA framework, which imposes lending restrictions on weak banks.
These are Allahabad Bank, United Bank of India, Corporation Bank, IDBI Bank, UCO Bank, Bank of India, Central Bank of India, Indian Overseas Bank, Oriental Bank of Commerce, Dena Bank and Bank of Maharashtra.