New Delhi: The Reserve Bank has rejected Bank of Maharashtra request to set off over ₹ 2,543 crore losses against the balance in its share premium account.
The Reserve Bank of India vide its letter dated 11 September 2018 has intimated about its inability to accede to the request made by the bank for setting off the accumulated losses against the balance lying in share premium account of the bank, Maharashtra Bank said in a regulatory filing today.
The Pune-headquartered state sector lender had got approval of board and shareholders to set off the accumulated loss of the bank as on 31 March 2018 in its annual general meeting held on 21 June, subject to regulatory approvals.
The bank had ₹ 5,293.72 crore in its share premium account by the end of fiscal ended March 2018.
A share premium account reflects amount in a company’s balance sheet accrued from additional amount paid by shareholders that is in excess of the par value of shares issued to them.
The bank had wanted to utilise the available funds in the share premium account and had sought permission to set off the accumulated losses to the tune of ₹ 2,543.66 crore by end-March 2018 to present a true and fair view of the financial position of the bank.
The lender wanted to take the set off to be reflected during the current financial year (2018-19) having received the necessary approvals and permissions.
The bank had reported a net loss of ₹ 1,119 crore in the first quarter ended June of the current fiscal. There was a net loss of ₹ 412.20 crore in the same period of preceding fiscal.
In the entire 2017-18, the bank had reported a net loss of ₹ 1,145.65 crore. The gross non-performing assets (NPAs) hit 21.18% of gross advances by end of June 2018 at ₹ 17,800.30 crore.
Stock of Maharashtra Bank closed 1.04% up at ₹ 12.66 on BSE.