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Govt to infuse Rs1,248 cr into UCO, United Bank of India

Govt to infuse Rs1,248 cr into UCO, United Bank of India
PTI
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First Published: Wed, Feb 16 2011. 07 07 PM IST
Updated: Wed, Feb 16 2011. 07 07 PM IST
Mumbai: The government has decided to infuse Rs1,248 crore into two public sector banks UCO Bank and United Bank of India as part of recapitalisation package to shore up equity capital.
The government has decided to infuse Rs940 crore into the Tier I capital of the bank by way of preferential allotment of the equity, UCO Bank informed the Bombay Stock Exchange in a filing today.
Besides, another Kolkata-based United Bank of India would get Rs308 crore.
At the same time, Allahabad Bank and Chennai-based Indian Overseas Bank are having board meeting on 18 February and 19 February respectively to consider preferential allotment of equity shares to the Government of India.
However, quantum of capital infusion in these two banks are not yet known.
The notification in this regard was issued by the government yesterday.
Both the banks will have the board meeting on 19 February to consider the capital infusion.
The board will consider among other things the reclassification of the authorised capital of the bank, United Bank of India said in a separate filing.
It is to be noted that finance minister Pranab Mukherjee announced capital infusion of Rs15,000 crore into public sector banks during the current fiscal to ensure that these entities are able to attain a minimum 8% Tier-I capital by 31 March, 2011.
As part of recapitalisation, the government had infused Rs6,211 crore into five banks. The banks, which had got capital support from the government in the first tranche included Union Bank of India, Bank of Maharashtra, IDBI Bank, UCO Bank and Central Bank India.
Besides, the government also approved additional capital infusion of Rs6,000 crore in 10 public sector banks with an objective to raise its holding to a minimum 58% in all state-run banks.
The proposed capital infusion is to enhance the lending capacity of the state-owned banks to meet the credit requirement of the economy in order to maintain and accelerate the economic growth momentum.
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First Published: Wed, Feb 16 2011. 07 07 PM IST