Government infuses ₹2159 crore in United Bank of India1 min read . Updated: 27 Dec 2018, 09:28 PM IST
The Finance Ministry had informed the bank about the capital infusion on Wednesday (December 26), United Bank of India said in a regulatory filing
New Delhi: State-owned United Bank of India on Thursday said the government has decided to infuse ₹ 2,159 crore in the bank as part of ₹ 28,615 crore capital infusion to be done in about half a dozen banks.
The Finance Ministry had informed the bank about the capital infusion on Wednesday (December 26), United Bank of India said in a regulatory filing.
“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, government has decided to pump ₹ 28,615 crore 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 ₹ 10,086 crore, followed by Oriental Bank of Commerce, which might get ₹ 5,500 crore through recapitalisation bonds, sources added.
Other banks that are likely to receive capital infusion in this round included Bank of Maharashtra which may get ₹ 4,498 crore and UCO Bank ( ₹ 3,056 crore).
The government had earlier announced an infusion of ₹ 65,000 crore in PSBs in 2018-19, of which ₹ 23,000 crore has already been disbursed, while ₹ 42,000 crore is remaining.
Earlier this month, Finance Minister Arun Jaitley said the government would put an additional ₹ 41,000 crore in PSBs over and above what was announced earlier.
On December 20, the government sought Parliament’s approval for infusion of an additional ₹ 41,000 crore.
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.