You are here: Home » PTI Stories » National » News
Business Standard

Over dozen PSBs to get Rs 46K cr capital infusion this month

Press Trust of India  |  New Delhi 

Over a dozen public sector banks (PSBs) will get Rs 46,101 crore as part of capital infusion in the current fiscal ending this month to allot shares to the government in lieu of equity capital.

These banks, including SBI, PNB, of Baroda, Central Bank, and OBC, have called shareholders' meetings this month to pass the resolution to allot preferential shares to government so as to receive the capital.

Country's largest lender State of (SBI) will get the largest sum of Rs 8,800 crore as government's capital infusion.

A of shareholders will be held on March 15 to pass a special resolution to create, offer, issue and equity shares, to be determined by board, aggregating to Rs 8,800 crore on preferential basis to the government, the bank said in a regulatory filing.

said the preferential issue of shares to the government will enable the bank to meet its common equity tier -requirement under Basel-III.

The second-largest bank PNB, which is embroiled in Rs 12,646 crore fraudulent transactions, allegedly by diamond jewellers and Mehul Choksi, will get Rs 5,473 crore as capital infusion.

An extraordinary of shareholders will be convened on March 16 to create, offer and allot 33,49,85,922 equity shares amounting to Rs 5,473 crore to government on preferential basis, said in an exchange filing.

"In an initiative to strengthen the capital adequacy of the public sector banks, the government decided to raise its holding in these banks...

"Shareholders approval is therefore sought for issue of equity shares up to an amount of Rs 5,473 crore through preferential issue of equity shares in favour of Government," said.

will get Rs 5,375 crore as government equity capital; 4,835 crore; of Rs 4,524 crore; Rs 3,571 crore; Rs 3,045 crore; Rs 2,839 crore and Rs 2,187 crore.

Vijaya Bank's extraordinary will take place tomorrow to seek nod from shareholders to allot preferential shares to government for Rs 1,277 crore capital infusion; for Rs 1,890 crore (March 12); - Rs 1,500 crore and & Sind Bank - Rs 785 crore.

Several other like Bank of have already approved the preferential issue of shares to government for Rs 2,257 crore; - Rs 4,865 crore; - Rs 3,173 crore; - Rs 2,634 crore; - Rs 4,694 crore and - Rs 2,729 crore.

received Rs 1,375 crore in December as government equity and is slated for another capital infusion of Rs 5,134 crore by the month end.

In October, government had announced a mega-Rs 2.11 lakh crore capital infusion into PSBs in the course of next two years, of which Rs 80,000 crore are to be raised via issuance of bonds by the banks.

The intent of this huge capital infusion is aimed at strengthening the PSBs and to help them clean-up their balance sheets of the bad assets they have been plagued over the last several years.

Several mechanisms like referring cases of NPA accounts to (NCLT) to recover dues as well as selling bad loans to asset reconstruction companies (ARCs)/banks/FIs/NBFCs are also being employed by banks to get rid of the bad assets.

PSBs sat on bad loans of Rs 7.34 lakh crore at the end of second quarter ended September of the current fiscal, a bulk of which came from corporate defaulters.

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, March 08 2018. 20:50 IST